In the dissertation the in-depth study of substantive characteristics concerning the essence of the concepts of "liquidity", "liquidity risk", "liquidity regulation" and " tools of banks’ liquidity regulation" is conducted. It is proved that in the modern conditions of financial market volatility, liquidity is the main qualitative characteristic of banking, ensuring the financial reliability and stability of the banking sector of the country at whole. In this aspect, increased attention also needs the liquidity risk of banks, which is one of the main types of financial risk.The main conceptual approaches to the process of banks’ liquidity regulation have been formulated, which consists in the use of monetary policy operations, internal banking and legislatively defined tools, methods and procedures to remove excess liquidity or to finance its shortage in order to ensure the stable activity of the country's banking sector. There are three objectives of liquidity regulation, such as: to reduce the impact of uncertainty on the bank risk profile; to build up liquidity buffers and to smooth the systemic aspects of the liquidity crisis.The dissertation proposes to understand the tools of banks' liquidity regulation as the specific levers by which supervisory authorities (individual bank management, Central bank or international regulators) influence on liquidity in order to bring it to the desired level and maintain overall banking stability. The totality of the tools of banks' liquidity regulation should be classified on 2 grounds: 1) depending on the significance of the instruments (instruments of international regulatory standards; instruments for regulating the banking system; instruments for regulating the bank); 2) based on the level of their implementation and use (internal and external tools). The main types of the tools of banks' liquidity regulation are described, their development and features of use are traced.
The approaches to ensuring the efficiency of use the liquidity regulation tools by National Bank of Ukraine was defined. The efficiency of the use the banks' liquidity monitoring tools has been assessed, which is mainly reduced to the assessment of compliance with liquidity standards conducting a ratio analysis and a gap analysis.
It is proved that formation of an effective business model of the institution contributes not only to the profitable activity of the bank and its development, but also forms the basis for introducing a differentiated approach to micro-level regulation. Based on a comprehensive analysis of the liquidity situation and the use of regulatory tools for banks with five business models (retail, universal, corporate, corporate with retail financing, limited credit intermediation), the features of using the liquidity regulation tools for the banks of each business model was generalized. Modern realities have led to increased focus on the issues of identification and prevention the systemic liquidity risk, reflecting the inability of most banking institutions of a country / group of countries or the world to ensure the stable activity and development. In order to prevent systemic liquidity risk, the need to establishment the more tougher requirements to liquidity regulation for systemically important banking institutions was proved. Banks' liquidity regulation strategies was proposed depending on the phase of the financial cycles (the phase of rise and the phase of recession), and on the basis of this strategies the effective tools of liquidity regulation was determined. This approach involves moving from pro-cyclical regulation to counter-cyclical levers and tools, which would prepare the banking sector to the future shocks to overcome them as effectively as possible. An important factor for ensure the effective banks' liquidity regulation is to use an early warning indicators of the liquidity crisis, which every bank determines for itself. The development of additional indicators should be based on a systematic approach, on thebasis of which the use of some new indicators of early warning of the liquidity crisis was proposed, such as: the volatility of deposit and loan portfolios indicator, the matching coefficient of the volatility of deposit and loan portfolios and the liquidity systemic change indicator. The using of the liquidity systemic change indicator will help to comprehensively assess the level of change in the liquidity position over a period of time and form the basis for sound management decisions regarding the necessary revision and/or improvement of existing approaches to the process of banks' liquidity regulation.
Key words: liquidity, liquidity risk, regulation, tool of regulation, business model of bank, systemic risk, systemically important bank, financial cycle, stress testing, an early warning indicator of the liquidity crisis.
