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Vol. 13 No. 02 (2026)
International Multidisciplinary Journal for Research & Development

Articles

LIQUIDITY RISK MANAGEMENT IN BANKS AND ITS ROLE IN MAINTAINING FINANCIAL RESILIENCE

Published 2026-02-21

  • Khodjaeva Feruza Avazkhonovna

Khodjaeva Feruza Avazkhonovna
Independent researcher of the Samarkand Institute of Economics and Service

Abstract

Liquidity risk management has emerged as a critical component of financial stability, especially following the vulnerabilities exposed during past banking crises. The ability of banks to effectively manage their liquidity is paramount to ensuring not only their survival but also the resilience of the broader financial system. Recent studies reveal that liquidity shocks can precipitate rapid deposit outflows, leading to systemic crises when coupled with weaknesses in interbank lending mechanisms  (Rajendra P et al., 2025) . Furthermore, in exploring the delicate interplay between credit and liquidity risks, it becomes evident that while these risks may not directly interact contemporaneously, each independently affects bank stability, thereby necessitating a strategic approach to their joint management  (Ghenimi A et al., 2017) . This essay will delve into the intricacies of liquidity risk management, highlighting its pivotal role in enhancing financial resilience in contemporary banking practices.

Keywords

Liquidity risk management, Bank liquidity, Financial resilience, Asset–liability management (ALM), Basel III regulations, Liquidity coverage ratio (LCR), Net stable funding ratio (NSFR)

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References

  1. Padmini Rajendra, Bulani (2025). Surviving Liquidity Shocks: Insights and Lessons from The Recent Banking Crises. https://www.semanticscholar.org/paper/088b67aebfcfed75bf95f2f9ece0b21b6cf801b4
  2. Ameni Ghenimi, Hasna Chaibi, Mohamed Ali Omrı (2017). The effects of liquidity risk and credit risk on bank stability: Evidence from the MENA region. https://doi.org/10.1016/j.bir.2017.05.002
  3. Amara, Tijani, Mabrouki, Mohamed (2019). Impact de risque de crédit et de liquidité sur la stabilité bancaire. https://core.ac.uk/download/224779938.pdf
  4. Yi-Kai Chen, Chung-Hua Shen, Lanfeng Kao, Chuan-Yi Yeh (2017). Bank Liquidity Risk and Performance. https://doi.org/10.1142/s0219091518500078
  5. Jennie Bai, Arvind Krishnamurthy, Charles-Henri Weymuller (2017). Measuring Liquidity Mismatch in the Banking Sector. https://doi.org/10.1111/jofi.12591

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