Under normal liquidity management, deposit drains and loan commitment disbursement should not cause any major concerns for the financial institution. Major liquidity problems can arise where deposit drains are abnormally large; unexpected abnormal deposit drains (shocks) these may occur for all of the following reasons EXCEPT: a. The recent bankruptcy of a domestic bank sparks fear amoung depositors of a possible similar occurrence at another financial institution. b. Speculations of ongoing liquidity problems of a particular financial institution compared to its competitors´. c. The sudden withdrawal of funds by a significant number of depositors due to a major financial crisis taking place in the local economy. d. The sudden change in preference by investors from holding stocks and bonds to certain bank related deposits instruments
Under normal liquidity management, deposit drains and loan commitment disbursement should not cause any major concerns for the financial institution. Major liquidity problems can arise where deposit drains are abnormally large; unexpected abnormal deposit drains (shocks) these may occur for all of the following reasons EXCEPT:
The recent bankruptcy of a domestic bank sparks fear amoung depositors of a possible similar occurrence at another financial institution.
Speculations of ongoing liquidity problems of a particular financial institution compared to its competitors´.
The sudden withdrawal of funds by a significant number of depositors due to a major financial crisis taking place in the local economy.
The sudden change in preference by investors from holding stocks and bonds to certain bank related deposits instruments.
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