LIQUIDITY MANAGEMENT BY SOUTH AFRICAN BANKS

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Wessel Lourens Crafford, Frederik J. Mostert ORCID logo, Jan Hendrik Mostert ORCID logo

https://doi.org/10.22495/cocv9i3art4

Abstract

The management of liquidity is of prime importance to banks. This management process should be carefully planned and continuously managed to master a global and/or national financial crisis. The objective of this research paper embodies the improvement of financial decision-making by banks regarding the management of their liquidity. To achieve this objective, a literature study was initially done. An empirical survey followed thereafter, focusing on the 10 biggest banks in South Africa. They are the leaders of the South African banking industry, and as South Africa is a developing country with an emerging market economy, the conclusions of the study may also be valuable to banking industries of similar countries. The importance of the liquidity management factors, the problem areas surrounding this topic, as well as how often the requirements are adjusted to ensure proper and effective liquidity management are addressed.

Keywords: Banks, Basel Reports, King Reports, Liquidity, Management, Problem Areas, Ratios, Reserves Strategy

How to cite this paper: Crafford, W. L., Mostert, F. J., & Mostert, J. H.(2012). Liquidity management by South African banks. Corporate Ownership & Control, 9(3), 52-58. https://doi.org/10.22495/cocv9i3art4