Liquidity Management of the Participants in Chinese Real Time Gross Settlement Systems
16 Pages Posted: 26 Feb 2008 Last revised: 25 Oct 2009
This paper measures the performance level of liquidity management of the participating banks in RTGS system in China. Compared with the commercial banks in developed countries, this paper finds that the commercial banks are too conservative in liquidity management, and analyzes some main reasons for such situation. Furthermore, this paper explores some measures to improve liquidity management, and establishes a theoretical model about liquidity management of single commercial bank, and calculates out the optimal level of liquidity management.
Keywords: RTGS system, Liquidity management, Turnover ratio, Interbank money market
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