COMPARATIVE LIQUIDITY RISK ANALYSIS IN AWASH INTERNATIONAL AND WEGAGEN BANKS

Abstract

Comparative Liquidity Risk Analysis in Awash International and Wegagen Bank The Comparative Liquidity Risk Analysis in Awash International and Wegagen Banks. The main objective of the study was to assess the Comparative Liquidity Risk Analysis in Awash International and Wegagen Banks. The specific objectives were to assess the main sources of liquidity risk in these two banks, to asses systems they make to control liquidity risk, to compare which banks affected more by liquidity risk. The study was considered the effect on comparative liquidity risk analysis of capital adequacy, Gross domestic product, loan growth, size and inflation. In order to meet the objectives of the study, both primary and secondary data was used. The primary data was collected through questionnaires by using by using judgmental sampling techniques and the secondary data also was taken from books, internets, annual report of Woreda, and others. The study was benefited to develop intervention mechanisms those are tailored to the specific need of the study area, it helps concerned bodies in their effort to formulate policies, and it was used as a source material for further studies. And the research was employed descriptive statistics like percentages, charts and frequencies to analyze the collected data.The researcher used both quantitative and qualitative data. Quantitative data is used through closed ended questions in the questionnaires. Qualitative data collected through interview and open-ended questions in the questionnaires. The quantitative data that is collected through questionnaires is analyzed through descriptive data analysis techniques.The bank faces different problems to manage liquidity risk. These are no well-developed payment system and management information system (MIS) and there is no interdependence and flow of information in different department. Therefore, the researcher recommended that, all departments should clear knowledge and information to minimize the bank liquidity problem and work as synergy. Diversification of the uses and sources of funds is also an important issue in the banking industry