BANK OF BAKU AUDITORS REPORT AND
FINANCIAL STATEMENTS AT
31 DECEMBER 1998
Note 20 - Risk Management
Interest rate risk
Average rates applicable to the major components of the
balance sheet have been disclosed within the notes relating to these components.
Liquidity risk
Liquidity risk is defined as the risk when the maturity of
assets and liabilities does not match. The table below shows all assets and
liabilities by remaining contractual maturity as the Banks system is not
designed to separately identify interest-earning assets or interest-bearing
liabilities. Some of the assets may have a longer-term nature; for example loans
can frequently be renewed, and accordingly, short-term loans can have a
longer-term duration. The liquidity position of the Bank at 31 December 1998 is
set out below:
