The most important aspect of an enterprise or bank is maintaining its ability to strictly fulfill its obligations without additional costs and losses, which is defined by the concept of liquidity.
The term "liquidity" means the simplicity of turning material assets into money. Liquidity characterizes the willingness of a bank or enterprise to fulfill financial obligations. The company's liquidity indicators include several local parameters.
The balance sheet liquidity indicators reflect the current situation at a certain point in the ratio of the bank’s liquid assets and its liabilities. In other words, this is the ability to timely convert assets into means of payment in order to fulfill their obligations fixed in the balance sheet.
Absolute liquidity indicators are a broader concept than balance sheet liquidity, which characterizes the ability to fulfill obligations by partners or other subjects of relationships. It should be noted that the bank is considered liquid, having a liquid balance. But the provision of bank liquidity cannot be equated only with the fulfillment of this condition. A number of external factors can destroy the bank's liquidity, even if it has a balance close to ideal.
The liquidity of an individual commercial bank, as well as the combined characteristics of all banks on this basis, determine the concept of higher order liquidity - the liquidity of the banking system.
The liquidity indicators of an enterprise are a complex, multi-level concept, which is a system of relations regarding the fulfillment by enterprises of their obligations in order to obtain a certain effect, corresponding to each level of functioning.
Today, liquidity is one of the key economic indicators of economic activity, and its provision is an integral criterion for the stable development of the economy as a whole. The liquidity indicators of the enterprise, on which the stability of the activities of all business entities and citizens participating in monetary and credit relations largely depend, are one of the key parameters of economic health. For example, recent events in the financial markets of several countries have confirmed the urgent need for the development of the banking sector along with the reform of various sectors of the economy. Most medium and small enterprises and banks today do not pay enough attention to the implementation of economic and mathematical analysis methods in their activities , and the level of modern information technologies used by them is still low. As a result, low liquidity indicators of the enterprise or other business entity.
The same applies to the quality of management implemented in banks. In this situation, the bank’s task of maintaining its liquidity is much more complicated.
A special and very important role in maintaining bank liquidity is played by the Central Bank. In order to monitor the maintenance by commercial banks of their liquidity level, the National Bank established mandatory economic standards: instant, current, short-term liquidity and a minimum ratio of liquid and total assets.
Their daily execution allows the central bank to control the availability of the necessary amount of liquid funds for commercial banks for a specific period.
Such actions make it possible to effectively regulate the liquidity of the system of banks and enterprises, by means of mandatory reservation and enforcement of standards, keeping the latter in the so-called “security zone”. Thus, the implementation of all regulations and instructions with a moderate business strategy guarantees a commercial bank a fairly high level of economic security, including liquidity.