However, major changes may result

The value of the coefficient of stability for different types of liabilities can fluctuate over a fairly wide range. For example, funds from the public, placed in a stable operating banks in the absence of the crisis in the financial sector are quite stable. A different picture emerges for corporate funds. In contrast to this category of depositors less conservative clients, and the remnants of these kinds of liabilities subject to significant fluctuations. Because the interest rate on deposits rarely exceeds the level of profitability, the money companies are located in these accounts, they actually "temporarily available", and the outflow is predominantly determined by their production cycle enterprise and not the conditions offered by the bank. This makes it difficult to forecast the stability of these liabilities, and to avoid the loss of autonomy in the implementation of interest rate policy, it is recommended to set lower than the deposit, the coefficient of stability. The need for liquidity of the bank estimated establishment for each category of funding requirements to maintain some proportion of funds in liquid form. For stable sources of this percentage may be low - 10-15%, for varying contributions of non-deposit liabilities, and - 25-30%, for the obligations of "hot money" - 80-90%. Specific amounts of reserve of liquid assets are determined subjectively, based primarily on considerations, assumptions and experience of managers of each bank. Analysis of liquidity is the simplest method of assessing the bank's liquidity. The weak point is the static coefficient analysis evaluation of liquidity (at a certain time), which does not take into account its dynamic nature. The main drawback of this method lies in the fact that the bank must store large amounts of assets in liquid form, and this negatively affects earnings. Category: Management Operations Commercial Bank