China clearly stipulated the operating principles of "safety, liquidity and profitability" in the Law of the People's Republic of China on Commercial Banks.

the unity of safety, liquidity and profitability is a general principle of operation and management generally recognized by commercial banks all over the world.

according to the change of business environment, bank operators comprehensively coordinate the collocation of different assets and liabilities, and seek the best combination, so as to realize the coordination and unity between the "three principles".

(1) safety principle

safety means that commercial banks should try their best to avoid the influence of various uncertain factors and ensure their steady operation and development.

because of the special operating conditions of banks, it is especially necessary to emphasize safety. In addition, banks have less self-owned capital and are basically operating in debt, so they can't afford big losses.

the security of commercial banks includes the security of asset business and liability business.

in the debt business, it is mainly faced with the possibility of customers withdrawing funds at any time.

in the asset business, we may face the problem that the scale of loans and investments exceeds the source of funds.

The factors that affect the safety of bank operations include credit risk, interest rate risk, exchange rate risk, liquidity risk and policy risk.

The measures to ensure safety in banking operations include: banks should refuse to lend money to businesses that are too risky and destined to bring losses to banks, so as to avoid risks; In business operation, banks should reasonably arrange the scale and term structure of loans and investments, and strengthen credit investigation and business prediction of corporate customers to reduce or control risks; Bank assets should be properly dispersed in both types and corporate customers to avoid large credit risks caused by excessive concentration; Banks can transfer risks through transfer, insurance, hedging and swap transactions.

(II) Liquidity principle

Liquidity refers to the ability of commercial banks to meet customers' cash withdrawal and necessary loan demand at any time, including the liquidity of assets and liabilities.

Among them, the liquidity of assets refers to the ability of assets to be quickly realized without loss, and the liquidity of liabilities refers to the ability of banks to obtain the required funds at any time at a lower cost.

The main methods for banks to maintain liquidity include establishing a hierarchical asset reserve system.

Reserve assets mainly refer to cash assets and short-term securities held by banks.

the cash on hand, deposits in the central bank and interbank deposits of commercial banks are called tier-one reserves, also known as cash reserves.

They are the most monetary part and the first line of defense for commercial banks to meet their liquidity needs, and belong to non-profit assets.

Short-term securities and short-term bills owned by commercial banks are called secondary reserves. These assets can not only maintain a certain profit, but also be realized at any time or in a short time. They are characterized by short term, high quality and fast sales.

if the liquidity of a commercial bank is poor, it is necessary to borrow funds from the market in the form of increasing liabilities to meet the liquidity needs, including borrowing from the central bank, issuing large negotiable certificates of deposit, inter-bank lending, financing by using the international money market, etc., but maintaining liquidity through these forms needs to consider the cost of funds and the credibility of the bank.

(III) The principle of profitability

Pursuing profit and maximizing profit are the business objectives of commercial banks, which is also a concentrated expression of the corporate nature of commercial banks.

the profit level is the embodiment of the management level of commercial banks, and it is the management goal of commercial banks to take various measures to obtain more profits.

In order to be profitable, commercial banks need to appropriately expand the asset scale, rationally arrange the asset structure, reduce non-profit assets as much as possible and increase the proportion of profitable assets while maintaining the liquidity of bank assets; We should compare and choose between various financing methods and financing channels to absorb more funds at the lowest possible cost; Make full use of its own resources, actively carry out intermediary business and off-balance-sheet business, and at the same time improve work efficiency and reduce management expenses and operating costs.

(4) Coordination of "Three Principles"

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The "Three Principles" have both complementary and conflicting aspects in business.

safety and liquidity are closely linked.

generally speaking, the more liquid an asset is, the stronger its security is, and security is achieved on the premise of good liquidity.

In the short term, the more liquidity a bank has, the stronger its ability to resist accidents. However, if there is too much liquidity, the assets that a bank can use to create benefits will decrease, thus affecting its profitability.

But in the long run, security and liquidity exist for the pursuit of profitability. Only by ensuring security and liquidity can commercial banks achieve long-term profitability.

liquidity plays an important role in regulating the bank's operation in order to get the maximum profit from the contradictory relationship between security and profitability.

bank assets with high security can't bring huge profits to banks because of high risks and high returns; Low risk, low return; No risk, no gain.

it is impossible for a commercial bank to separate risks from benefits, so if a bank wants to make a profit, it must do a good job in coordinating security and profitability.

Doing a good job of liquidity can ensure profitability on the basis of giving consideration to safety, so liquidity plays an important regulatory role between safety and profitability.