COMMERCIAL BANKING THEORETICAL PRINCIPLES OF ASSETS AND THEIR REDUCTION FOREIGN EXPERIENCE

Khalimova Nilufar Umidjon qizi, Mitillaev Ibrahimjon Tursunpolatovich

Authors

Khalimova Nilufar Umidjon qizi, Mitillaev Ibrahimjon Tursunpolatovich

Keywords:

Commercial banking, asset management, asset reduction, risk and return, liquidity, capital adequacy, asset diversification, non-performing assets (NPAs), securitization, loan write-offs, foreign experiences, asset management companies (AMCs), financial stability, global banking practices, Basel III.

Abstract

The theoretical principles of asset management and their reduction in commercial banking are vital for maintaining financial stability, ensuring liquidity, and optimizing returns while mitigating risks. These principles encompass the trade-off between risk and return, the management of liquidity, capital adequacy, and asset diversification. Commercial banks often face the challenge of managing large portfolios of assets, including loans, investments, and cash reserves, and must reduce their asset base in times of financial stress. The reduction methods—such as asset sales, loan write-offs, securitization, and loan restructuring—play crucial roles in stabilizing the balance sheet and improving financial health. Foreign experiences, such as those from the United States, Japan, the European Union, China, and India, illustrate various strategies employed to manage non-performing assets (NPAs) and restore financial stability. These global case studies provide valuable insights into the practical application of asset reduction strategies, highlighting the importance of effective governance, regulation, and the use of specialized financial institutions like asset management companies (AMCs) in managing distressed assets. This paper explores the theoretical principles underpinning asset management in commercial banking and examines foreign experiences that offer valuable lessons for improving asset management and reduction practices in different banking environments.

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