The management of bank liquidity risk in the Basel III Era: The case of the Algerian Bank BADR
Keywords:
Cash management, Liquidity risk, ALM, Basel III, LCR, NSFR, Algerian banks, BADRAbstract
The paper explores the vital necessity of liquidity risk management inside financial organizations. Contextualizing the problem after the 2008 financial crisis, the paper explores the different Asset-Liability Management (ALM) strategies and their practical implementation. The work is based on a technique combining a literature review and a case study undertaken with the Bank of Agriculture and Rural Development (BADR) in Algeria. The measuring techniques employed include liquidity gap analysis, base surplus calculation (demonstrating a surplus of 5,700 MDA), and the transformation index (calculated at 1.52, showing adequate risk coverage). The findings show that ALM is a crucial instrument for predicting finance requirements and managing the profitability-risk balance. The discussion highlights the need for Algerian banks to consolidate their management practices and comply with international regulatory developments, particularly the LCR and NSFR ratios introduced by Basel III. The study concludes with recommendations aimed at strengthening the institution's resilience against liquidity shocks.
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