Bank Liquidity Ratios and Types

Bank liquidity ratios are ratios used to measure the ability of banks to meet their short-term obligations when billed

a. Quick ratio

Quick ratio is a ratio used to measure the ability of banks to meet their obligations to depositors (the owner of current accounts, savings and deposits) with the most liquid assets owned by banks.

b. Investing policy ratio

Investing policy ratio is a ratio used to measure the ability of banks to pay off their obligations to their depositors by liquidating their securities.

c. Banking ratio

Banking ratio is a ratio used to measure the level of bank liquidity by comparing the amount of credit extended with the amount of deposit held. The higher this ratio, the lower the level of bank liquidity because the amount of funds used to finance loans is smaller, and vice versa.

d. Assets to loan ratio

Assets to loan ratio is the ratio used to measure the amount of credit channeled to the amount of assets owned by a bank. The higher the ratio level, the lower the level of bank liquidity.

e. Investment portfolio ratio

Investment portfolio ratio is a ratio used to measure the level of liquidity in investments in securities. To calculate this ratio, it is first necessary to know in advance securities with maturities of less than one year, which are used to guarantee customer deposits if any

f. Cash ratio

Cash ratio is a ratio used to measure a bank's ability to pay off obligations that must be immediately paid by having to be liquid owned by the bank

g. Loan to deposit ratio

Loan to deposit ratio is the ratio used to measure the composition of the amount of credit given compared to the amount of public funds and own capital used.

h. Investment risk ratio

Investment risk ratio is a ratio used to measure the risk that occurs in securities investment, namely by comparing the market price of securities with their nominal prices. The higher this ratio means the greater the ability of banks to provide liquid tools

i. Liquidity risk ratio

Liquidity risk is a ratio that is used to measure the risk that banks will face if Gaga; to fulfill obligations to depositors with their liquid assets

j. Credit risk ratio

Credit risk ratio is a ratio that is used to measure the risk of loans extended by comparing bad loans with the amount of credit channeled

k. Deposit risk ratio

This ratio is used to measure the risk of bank failure in repaying depositors

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