Warning of the imbalance between liquidity and profitability
Warning of the imbalance between liquidity and profitability
4/25/2015 0:00
The tyranny of one end causes problems for banks
BAGHDAD – Mostafa Hashemi
warned banking expert risk of predominance by the profitability on the edge of liquidity in the smart equation for the management of the banks because the tyranny of any party in the equation on the other end is causing a problem for the bank, either in cash or in the profit and therefore will impact on his reputation in the market Abannok.oukal banking expert d. Essam Mahouelle that the bank (whether public or private) by a net profit, because it signify success in the policy of the If the banks and government, the commitment to make a profit means safety procedures at work and he Sarphi budget percentages of the profits, and if a special regional banks ( ), it is obliged to shareholders to achieve revenue of them and only went out with him to the bank and other financial Omassh generate their profit they seek as a result of their investment.
public funds and pointed out that the binding to keep a bank a good degree of liquidity has to cope with the sudden withdrawals, and wondered why imagine the bank that there withdrawals surprise it should be hedged and have to keep the level of good liquidity and continuously? He explained that banks and financial institutions dealing deposits audience you can withdraw money at any time, regardless of the lost private interest if they need a large liquidity, as Aehmh if the bank is successful or unsuccessful in banking policy does not care about any excuse may delay recovery of his money, and that the bank must be prepared to pay for public benefits at any time. Mahouelle confirmed that the bank find a case of intelligent balance between profitability requirements and liquidity requirements. reputation of the bank and pointed out that the problem of profit lesser the problem of liquidity so that the bank could not achieve this year’s profits may be achieved in the coming year, but he also said, but liquidity if it did not have enough has caused the loss of the bank to his reputation in the banking market and the owners of deposits a reputation if shaken, it is not easy to return stability again. He said, in the case of a liquidity problem list and a worsening in a private banks, for example, because of poor liquidity management and exceeded credit risk limits in the granting of credit, and the expansion of the granted without collateral (inadequate or completely without it), and the monopoly of some people from the bank’s owners the most liquidity of the bank to implement their own business without thinking about the return of those funds to the bank, funds that belong to the owners of deposits originally. He stressed the importance that should be obliging them to refund their loans to the bank one way or another may be done either by the central bank or by the executive branch as protectors people’s money in general. and the need to obtain all loans granted guarantees are inadequate and liquidation of property that has been pledged in favor of the bank guarantee for the loans. central role hinted Mahouelle to a prominent and important role of the Central Bank after the (lender last) and the savior of the bank through its assistance for the advancement of his distress conditions established is and is not allowed for those who have caused the problem of restoring their role in the management of the bank, and the appointment of a new administrative body and temporary in order to hold the reins of things. He said there is another solution boils down to merge the bank with another bank or to new investors provided enjoyment knowingly in the banking business and the use of Bmusrvien true for the management of the bank and are working to restore recovered again.
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