Part I:Liquidity risk is the type of risk in a bank, where the bank thinks it is not going to match the short time payment objectives. It might be because they would think they cannot manage to pay the fundings taken from the market, or because their securities cannot be sold rapidly to meet the market price of that security (Brown and Moles, 2014). The investor or any institution may not be able to convert their assets into cash without giving up on income or capital due to the lack of purchasers or any insufficient market (Brown and Moles, 2014). For example, a house work $200,000 might not have any buyers when there is no real estate season. But, when the market goes up, the house may sell for more than the actual price. However, if the owner of the house needs to sell it quickly, he can even sell it for less than the actual price. Liquidity risk lets the investors analyze that whether they can cover their short term debts and convert them into cash or not.For this study, Barclays bank is chosen to evaluate their liquidity risk performance around the last years, and USA’s Barclays bank PLC has been selected. Liquidity risk performance of Barclays USA division will be compared with the parent company and will tell about the performance of the subsidiary in USA.Most of the banking sectors, measure their liquidity risk performances by taking account of their financial reports i.e. Balance Sheet and Income statement (Mian and Santos, 2017). From these statements, banks usually analyze certain ratios which helps in understanding the liquidity performance of the banks. For this purpose, balance sheets and income statements of Barclays USA has been acquired, which will be attached in the appendices. From these statements, we will analyze the market situation of Barclays USA and Barclays itself, in context of their liquidity performance.Liquidity performance of a company is measured by certain ratios which help them understand about their liquidity position in the market (Mian and Santos, 2017). These ratios include current performance ratio, quick performance ratio, and cash performance ratio.Current ratio tells about the ability of a company to manage their short term debts and their liabilities (Louzis, Vouldis and Metaxas, 2012) . It is evaluated as; current ratio= current assets/current liabilities. A current ratio of 1:0 maybe very bad for a company if they run into a financial crisis. As for Barclays bank PLC USA, the current assets are a price of $74,522,000 (for the year 2017), and the current liabilities are at $24,627,000. The current ratio of Barclays USA is 3.02, which means their short term obligations are fully met and they are managing it effectively. As compared to parent Barclays, they have current assets termed at $94,719,200 and current liabilities at $79,202,900. Their current ratio is valued at 1.19 and is also good because the ratio less than 1.0 shows the lack of management in their liquidity performance.Quick ratio tells about the balance sheet being overleveraged or underleveraged (Louzis, Vouldis and Metaxas, 2012) . It might tell the company about decreasing sales, or they company is paying their bills more fastly than they should. It also tell about the cash convertion of a company’s assets and how fast they are receiving cash. It is calculated by (cash equivalents + market securities +accounts receivable)/current liabilities. As of 2017, US Barclays quick ratio is formulated as; ($40,107,000/$24,627,000). The quick ratio of Barclays US turns out to be 1.65 which is great indicator that Barclays US is managing their liabilities skillfully. As of 2017, Parent company Barclays, has quick ratio as; $177,822,000/$79,202,900. It makes it 2.26 and which tells that the parent company Barclays has more quality in their process of liquidity management.Cash ratio is used to tell the investors that when they need to convert their current liabilities into cash and cash ratio helps them identify the certain amount and time (Louzis, Vouldis and Metaxas, 2012) . Cash ratio is formed as; Cash + securities/Current Liabilities. As of 2017, US Barclays have their cash ratio formed as $12,086,000/$24,627,000). It results in 0.49 and which means the company has less lead over their liabilities to convert into their cash forms, and it might turn bad for them in the long run, while Barclays parent company as of 2017, has a ratio of estimate 2, which makes them more flexible in converting their liabilities into assets. It takes less time for the global Barclays company to have an approach of converting their liabilities to cash.Part II: Based on the competition fragilitiy view, used by many researchers in the past, rise in the competition level, also tends to have decline in the loan and deposit rates (Mirzaei, Moore and Liu, 2013) . It also reduces the profit margins of certain industries. Within the banking sector, it rises the risk taking by the banks and may decrease the value of the banks globally. A firm wide negative impact is opposed on the stability of banking sector. In USA context, the competition stabilitiy view says that the country having rising comeptiton level, should reduce the interest rates charged by the US banks to give a leverage for the investors to meet the market competition. In US, banking sector has a competition which is growing day by day, and has made the market more flexible to accepting risks (Mirzaei, Moore and Liu, 2013). It makes it more easier to make repayments for the loans, and improves the stabilitiy if the banks. Almost every bank in the US has acquired this strategy.Credit risk is the type of rish where the lender will not be able to make repayment of the debt he/she took from the bank. The debtor can be the one who took the loan, debt security issuance officer, or it can be another bank lending money from the interbank market (Mirzaei, Moore and Liu, 2013) . In a general context, when a price is increased, banks applies a decrease in the borrowing rates, which is given to the borrowers by the bank. This effects the credit and its risk, and the finance structure in two ways. One, the decrease in borrowing rates, makes it easier for the credit borrowers to make repayments to the bank. These approaches are attained by the US banks, and their market competition remains very stable according to this approach. Secondly, decline in the financing rates , may also decrease the profit margins of the banking sector, which will decrease the overall worth of a bank. In this case, US banks make more short term credits to a list of borrowers, to increase their profit margins, while having the risk of credit loss.In USA, banking market is widely changing everyday and the market situation is diverse according to the external factors involved in the competition. It is mostly a stiff competition. The franchise value of the banks in the country are mostly risk taking, with and without the intervention of government (Flamini, Schumacher and McDonald, 2009). The US banking market limits their risk taking to protect the inter monopoly. High competition would finish the banks and would impose high levels of risk taking and unstabilitiy of the finances. According to a study done by Marcus (1984) about the US market, he made one period model which told about the value decline of banks when they engage in riskier policies. Further researchers, made amendments to these models, and found that there was a negative relation in the credit risk and deposit power of the US market. Other studies have also told, in 1986 the US market was affected by the increased competition which never gave any profit to the banks, because there were no quality credit lenders. The decrease in value of a bank, also reduces the ability to hire potential buyers and overall profit of the credit decreases. Broecker (1990) showed, while studying the US market, that increased competition and increased quantity of banks in USA, also imposes a negative impact on the money worth of the whole banking system. But it now changed as the USA market is now different in forms of their banking system. The credit risk allows the banks to evaluate their worth as a credit taker and lender, and enhances overall market strength in terms of their liquidity performance. However, USA being the superpower has now a market where there banking competition is really complex and hard to understand.Part III: Banking profitabilitiy is mostly expressed as a combination of external and internal factors. The internal factor is derived from the annual reports i.e. income statemement, balance sheet. These in-house factors can be termed as bank definite or micro determinants of banking profits (Almarzoqi, Naceur and Scopelliti, 2015). The external factors are the variables, which do not relate to bank itself but they tell about the legal and economic culture, that affects the enactment of a financial firm. Many researchers have aimed to analyze the profitability and its factors. Haslem (1968), and Bourke (1989) were amongst the researchers who focused on the factors about overlapping and single based countries with the banking sector, and analyzed their profitability (Flamini, Schumacher and McDonald, 2009). Another study by Bikker (2002) put emphasis on the bank’s profitablitiy and the business cycle relationship.The study here is focusing on the bank specific and macroenvironmental factors of Barclays in USA, and the affects on the profitability due to these factors.Studies have told that the internal factors include the risk management, capital deployment, size and expense management to bring forward and changes according to it. Size is mostly determining the accountance of current economics or diseconomics in the overall market. Smirlock (1985) and Akhavein et al., (1997) found a positive relation between bank profitability and size. Maksimovic (1998) tells that various legal, financial and other (corruption, bankruptcy) factors are the determinants of size of the banks. Size is also related to the capital capacity of a banking firm, where banks like, Barclays give away less expensive capital, and have a higher profitablity. In USA, Barclays has the factor to consider about the internal factors as discussed above, that size needs to be determined in the process to make sure that the allocation of capital is being deployed to accurate markets. Goddard et al., (2004) tells, that all banks in the US region compare their banking size with the capital ratios, which is suggested to be positive in terms of size. It means that if the size increases in the small or medium banks, the profit also increases. Other studies also tells us that, a small amount of money saving can be accomplished by growing the size of the banks. In terms of large banks, they could face scale imbalances by increasing a large amount of size in the banking sectors.The necessity of risk controlling in the banks, is inbuilt in the theme of banking industry. In context with the US, low levels of liquidity and poor asset quality are two important factors in the banking sector failure. In USA, when a bank is facing risk issues, they tend to diverse their cases and increase the liquidity performances to decrease the level of risks. In accordance, the risk is divided in to credit and liquid risk. Thornton (1992) finds a negative relation between profitability and liquidity. Other studies tell that, there is adverse relation between credit risk and cost-effectiveness. This aspect has made it obvious that in country like USA, more loans are given and less are returned, which makes the risk factor very high. Subsidiary of Barclays working in US, have to manage this aspect, as risk management can go vital if not controlled. As the study says, that more loan given, less return will come, so Barclays can minimize this factor in US, to create diversity in the bank.Bank expenditure is also a very important aspect of banking profits, which is closely linked with efficiency management of resources (Boyd and De Nicolo, 2005). There have been debates about involving an expense related factor in the costing procedure of the microeconomic profitability function. Thornton (1992) finds a positive relation amongst quality management and profit. Talking about the external factors of banking profits in US, we should consider evaluation of macroeconomic factors like cyclical output, inflation, and interest rates (Boyd and De Nicolo, 2005).An important issue is the ownership status of the banks in relation to their profitability. However, there is little research done this issue which is arising now in the US banking markets. Short (1979) provides evidence saying that there is a highly negative relation between profitability and ownership in banking. Ownership of government in the banks and its daily running, has played a negative role in the banks performance. That why some banks in the US, are not growing because of bad ownership. In response, Thornton (1992) says that there is not relevant link between ownership and profitability. Profitability is determined by the macroeconomic factors, and has influenced the banking sectors as well. Inflation, growth rate of money, and interest rate the key determinants of the macroeconomic factors. Revell (2013) made analysis and found an issue between the relation of profit and inflation. He told that the affect of inflation on the profits of the banks, was depending on the wages and operating expense increase even more than the inflation. US economy has now made them settle in the inflation and its management by foreceasting their industry wise analysis and implementing them. US banking markets have controlled their overall costs and wages, and controlled the inflation issue which was rising previously ans causing problem to the US economy. Perry (2002) says that the inflation affects on banks profitability is determined by the way banking sector controls the inflation. It makes it vital for a bank to maintain its financial condition in such a state. If a bank can manage their inflation rate efficiently, it means they can maintain their interest rates to increase their income, more rapid than the costs and are most likely to achieve higher profits (Tabak, Fazio and Cajueiro, 2012). Most studies have shown a positive relation, in the study of inflation and profit of a banking sector.According to the above mentioned factors, Barclays have to consider these in entering US as a well reputed bank. Internal and external factors are in every aspect, but when looking in a financial institution, they need to be organizaed accordingly. It helps in understanding the positive and negative side of the topic, and better evaluate future and current results (Athanasoglou, Brissimis and Delis, 2008). Launching or entering new subsidiaries, in any country, is vital and should be followed with proper analysis at the first. The three factors listed above are to be considered by Barclays, to be successful in US banking markets. Liquidity and credit riks performance of Barclays has shown that they do not lack any aspect of entering the global markets, but being the market giants it is important for them to organize and structure proper tehcniques required in the field.ReferencesAlmarzoqi, R., Naceur, M.S.B. and Scopelliti, A., 2015. How Does Bank Competition Affect Solvency, Liquidity and Credit Risk? Evidence from the MENA Countries (No. 15-210). 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