Abstract
Multiplication of credit funds has always been a basic assumption in the work of credit organizations. In modern conditions, they occur with banks, funds and other institutions that deal with lending. The paper examines the problem of interdependence between the goals of the central bank and the commercial bank. The main goal of the central bank is to maintain price stability. However, if the country has a high share of foreign debt in the gross domestic product, the activities of the central bank are redirected to discouraging the growth of borrowing by banking institutions abroad. In order to prevent such borrowing, the central bank uses several instruments of monetary policy, among which the limit value in the rating of the credit multiplier stands out. The importance of the threshold value in the process of multiplying the value that is lent contributes to preserving the relationship between liquidity and profitability in the appropriate proportion. The lack of funds leads to illiquidity and its consequences, and in modern conditions, unprofitability also leads to the same outcome. In this paper, we will present the application of the threshold value in creating a bank credit portfolio.
Keywords
Array
Array
Array
Array
References
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).