Following the government''s decision to shift from command economy to a free market one in 1991, the banking business in Ethiopia is booming and as a result, the number of banks is increasing as time passes. With the increasing number of banks, the need to regulate their liquidity in particular is of great concern.This very sensitive issue, however, is not being well addressed in the different agenda set to discuss it. Moreover, there are no or only very few literatures on the area.Regulation of banks'' liquidity is a very challenging task and cannot be effectively carried out in a regulatory environment which is poorly equiped interms of human, material resources and modern technology. This book, therefore, closely analyses, inter alia, the concept of liquidity regulation, its rationale, the regulatory modalities set in place and the consequences in case of failure to comply with liquidity requirements and gives a comparative analysis of the law against the practice. The book is a big contribution to the scarce academic discourse in the area and could be useful to bankers, regulators or others having interest in the area.