The Management to Commercial Bank's Reserve Based on Liquidity Risk

It is an important source for Commercial bank's reserve to deal with liquidity risk. In the modern society with highly increasing liquidity risk, the management to commercial bank's reserve is particularly important. Based on the analysis of Monti-Klein model, I take liquidity risk into account and draw some interesting conclusions: 1. In the management to Commercial bank's reserve, the increase to the level of penalty interest rate will lead to a reduction in the number of loans and an increase in the number of deposits; 2. If the behavior of public withdrawal is more uncertain, it is more likely to lead to a decline in the number of loans in most cases.