The liquidity and solvency management of the bank theoretically relies on many different theories: the theory of loans, movements, expected income and others. All of them have their own advantages and disadvantages and in their pure form do not meet the requirements of practice. However, by synthesizing certain theoretical aspects, banks create their own liquidity management concept that best meets the requirements of their activities and successfully apply it.
At the present stage, the choice of liquidity management concepts used in banking is determined by two approaches: the bank must either always have sufficient liquid assets in stock or have the ability to attract liquid assets at any time in the financial market. In the economic literature, this alternative is expressed in the division of bank liquidity into liquidity- “reserve” (stationary liquidity) and liquidity- “flow” (current liquidity). The first of these describes the liquidity of the bank's balance sheet at a particular point in time, the willingness to fulfill all current obligations on the basis of available liquidity. Current liquidity shows the possibility of converting low-liquid assets into more liquid ones, which, together with the provision of minimum reserves of liquid assets, allows more efficient management of emerging situations.
This approach to the consideration of liquidity determines the content of the current liquidity management strategies, the main of which are: strategies for managing assets, liabilities, assets and liabilities.
The first of these is the accumulation by the bank of liquid funds in the form of money. The application of this strategy is determined by the presence of developed financial markets in the country with a stable price level and the possibility of reimbursing initial investments at the lowest risk. Liabilities management strategy is based on a loan of means of payment when current liquidity is low. The most consistent with the requirements of modern practice is the third strategy. It assumes that current liquidity is maintained to the extent that they are necessary to cover current requirements, and if necessary, their active attraction to the market.
Current liquidity, with all of the above strategies and methods, in practice is provided at a very acceptable level, and management strategies themselves are quite effective and are widely used by modern banks in the liquidity management process. However, the presence of a number of inalienable conditions for their successful application does not give the bank full confidence in the safety of its activities. These methods of resource management are characterized by a low level of accuracy, which leads to the loss of a significant part of potential profit and the situation when current liquidity decreases. In this case, they can only be used mainly to resolve an existing situation. However, an effective way to preserve the bank’s liquidity is to forecast a possible escalation of negative circumstances with the aim of taking proactive measures. Therefore, it is important at this stage to consider the practical manifestation of bank liquidity also as “forecast” liquidity.
Liquidity- “forecast” is characterized by identifying possible scenarios for the development of the situation in the field of bank liquidity in the prevailing conditions and the adoption of a number of timely measures in order to derive maximum benefit from the current situation. The liquidity management methodology for this approach is based on the method of mathematical modeling of dynamic processes with the optimization of specific indicators. These methods make it possible to increase the effectiveness of managerial decisions and ensure the necessary level of security.