Aspects of Banking System Organization in Southern Europe

If a bank does not hold a high-volume of cash from its customer’s deposits, at least should have a considerable part of its investment portfolio in highly liquid assets, which may be sold quickly in an emergency event, with ease and without major fluctuations in price. Banks play vital roles in economic developments within different states. The efficient banking systems are leverage force for development. Banks create liquidity when holding illiquid items for the non-bankers and offer them with liquid liabilities. The history of banking failures has provided clear evidence showing the predominant impact of undue liquidity shortage .