The essence and the asset and liability management at the bank

The essence of the assets and liabilities of banks due to their role in the economy as financial intermediaries, accumulating temporarily surplus funds of economic entities and place them on terms of repayment, maturity and payment of those subjects in the economy that need to assure the production process. The main tasks of a modern commercial bank is to provide various types of loans to its customers, which calls for raising funds from various sources at the appropriate time, the implementation of cash management services for customers and payments, the transactions of buying and selling foreign currency as on behalf of clients, both for his own expense. To meet these objectives the bank must ensure that the mobilization of necessary resources from various sources at different times, to achieve an optimum combination of time raising funds and their costs in order to profit while maintaining the necessary level of liquidity and optimize the risks involved in this. These objectives are achieved by the bank during the various active and passive operations, while forming the assets and liabilities of the bank. Active operation - it posting and use of the bank's own funds and borrowings for a profit for the rational allocation of risk for certain types of operations and maintenance of liquidity. All assets of commercial banks can be divided into primary reserves, loans to bank investments in securities, fixed assets and intangible resources. Category: Management Operations Commercial Bank | Tags: asset management