The impact of liquidity risk management on the performance of Albanian Commercial Banks during the period 2005-2015

Abstract

This study is focused on liquidity risk analysis in order to identify if this risk affects the profitability of Commercial Banks operating in Albania. The paper includes the identification, the analysis and the management of this type of risk. Through numerical analysis it will be studied the quantitative effect of liquidity risk on the profitability of commercial banks in Albania during the period 2005-2015. Following the study, liquidity risk is expected to have a considerable effect on the profitability of Commercial Banks operating in Albania. The analysis is based on an empirical study with secondary qualitative and quantitative data. This study provides a contribution within the identification of liquidity risk factors that affect more the profitability of the Albania Banks and the finding of a scientific solution in order to manage this risk in a more efficient way. The recommendations derived from this study will serve to young researchers of academic area and professional field. Also, this paper will create new discussions on risk management instruments used in the Albanian banking system.

Keywords: Profitability, Liquidity risk, Commercial banks, Albania