Designing the Optimal Model of Banking Assets and Liabilities Management based on System Dynamics Approach

Subject Areas : Financial and Economic Modelling

fatemeh  Taheri ¹ (Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran)
Mohammad  Setayesh ² (Department of Accounting,Borujerd Branch, Islamic Azad University, Borujerd, Iran.)
mohammad hasan  janani ³ (Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran)
mahmoud  hematfar ⁴ (Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran)

Received: 2021-04-21 Accepted : 2021-10-31 Published : 2023-01-01

Keywords: Systems thinking, Asset management, System Dynamics, Credit assets, Liability management,

Abstract :

Banks as the largest financial intermediaries play a vital role in collecting savings and directing them toward manufacturing activities. Hence, assets and liabilities management is crucial for them and their depositors. In this study, through system dynamics approach, a dynamic model was proposed to manage assets and liabili-ties optimally. After building the model and conducting validation and sensitivity analysis, three scenarios were devised and were simulated and analyzed via the proposed model. The results revealed that taking effective decisions and actions to collect more deposits, especially time deposits as well as increasing the quality of credit assets (if allocated optimally) can be effective in improving the performance of banks. Therefore, using systems thinking and system dynamics can aid banks in managing their assets and liabilities optimally. mary of the significant items in the paper, including the results and conclusions.

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