What is the management of responsibility?

Liability management is a method used by financial institutions to maintain working capital and saving capital. Most financial institutions, such as banks or trusts, take a large amount of money that belongs to completely or partly, other people. Although they may not be full of money, these institutions can invest and spend money as they consider fit. Management of liability allows these institutions to spend money and have enough money to pay people if they ask for a refund. In the case of a financial institution, this responsibility is usually the money that the individual has given them. These obligations are used as money capital for investment and purchases made by institutions.

When a person takes money to the bank, he gives him control over the funds in exchange for certain advantages. These advantages, including prevented checks such as checks or interest, and compensate the fact that he no longer has complete control of his money. If he wants his money to come back, all he has to do is ask for aThe bank will return it. This releases the bank from any responsibility, but also removes its money from the bank system.

Most financial institutions use the techniques of responsibility to determine what kinds of money they need to maintain. It is important that the institution has enough money to cover any selection and simple transactions that appear during the working day. This money is an uninhabited capital that is used to maintain basic operations of the institution. In general, this represents a small number of total assets of the institution.

6o solid and long -term investment. Liquid assets earn money on the institution, but can be transferred back to real money quite quickly. Long -term investments can have large collections for withdrawal and fines, so the institutions want to keep them stable if possible.

In most cases, when a person gives money to a financial institution, he concludes a legal contract.In most cases, the contract states that the institution has a period between someone who applies for money and he actually receives it. This window determines the ratios used in most responsibility management systems. Smaller windows mean more cash and liquid assets, while longer windows mean less.