Abstract:
The objective of the dissertation was to build a simulation model for liquidity management in multi-branch financial institutions in Turkey. TURBO-BASIC language was used. The model was tested with real data to determine its validity. Sensitivity of the model to various parameters was also tested. It was found that the output of the model was close to real numbers thus establishing its validity. Interest rates, level of liquid assets, and standard deviations of various flows turn out to be the most important parameters. Transaction costs, although they are very important in theoretical studies, turn out to be unimportant in applications in Turkey. This is due to the very high interest rates compared to transaction costs.
