Liquidity risk management in commercial banks in compliance with Basel Accords

Abstract

The recent global financial crisis and Eurozone crisis have proved the increasing importance of liquidity management,
giving rise to the issuance of the Basel III Accord which focuses more on liquidity issues and requires banks to meet higher
capital adequacy requirements. Many countries have been working out their road maps to the effective adoption of the
Basel regulations for liquidity to assure the sustainable development of their banking systems in the challenging global
economy. As Vietnam’s economy has been integrating into the world economy more deeply, the Vietnamese commercial
banks are not exceptions and consequentlyneed to timely adopt the Basel standards for banking management in general
and for liquidity risk management in particular. This article seeks to review the Basel liquidity framework, assess the
liquidity risk management in the Vietnamese commercial banks, and provide some recommendations to manage liquidity
risk in the Vietnamese commercial banks in compliance with the Basel Accords.