# Bank liquidity (liquidity of the bank system)

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- Post ID: 592746
- Modified: 2023-07-25T21:00:42+00:00
- Language: en

## Definition

Liquid assets that banks need to maintain their ability to pay. - From the perspective of the individual bank, this basically includes all assets that can be converted into cash at any time (liquidated: which could be easily and without any problem be converted into cash), such as marketable securities or balances with other credit institutions. - However, the banking system as a whole cannot pay with claims of banks on each other, but only with central bank money. The banks' aggregate liquidity position therefore only includes - their current holdings of central bank balances and cash: Cash - plus their potential balances that can be obtained from the ECB through its facilities. - See Basel III, benchmark allocation, capital buffer, countercyclical, core capital ratio, liquidity management, solvency supervision, corporate finance. - For the liquidity situation of banks, see the annex "Euro area statistics" in the respective ECB Monthly Bulletin, section "Monetary developments, banks and investment funds." Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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