One of the most important tasks of the management of a bank is to estimate and properly cover the bank’s need of liquid assets. On long term, the profitableness of a bank may be negatively affected in case the bank detains in its portfolio too many liquid financial assets as compared with its needs; yet, on the other hand, fewer liquid assets may determine severe financial problems, especially for small banks, and may generate even bankruptcy.
asset, banking system, investments, liabilities.