You are the bank's liquidity manager. What should you do if the RBA increased the cash rate (overnight interbank borrowing) and why? Answer this question by filling in the blanks. Please use the suitable word provided in the round brackets. The risk of illiquidity (increased/decreased/did not change). The cost of illiquidity (increased/decreased/did not change). Therefore it makes sense to (increase/decrease/ maintain) the ESF buffer. As a result your bank will be willing to create (more/less/the same) loans and deposits.
You are the bank's liquidity manager. What should you do if the RBA increased the cash rate (overnight interbank borrowing) and why? Answer this question by filling in the blanks. Please use the suitable word provided in the round brackets. The risk of illiquidity (increased/decreased/did not change). The cost of illiquidity (increased/decreased/did not change). Therefore it makes sense to (increase/decrease/ maintain) the ESF buffer. As a result your bank will be willing to create (more/less/the same) loans and deposits.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
5
Transcribed Image Text:QUESTION 5
You are the bank's liquidity manager. What should you do if the RBA increased the cash rate (overnight interbank borrowing) and
why? Answer this question by filling in the blanks. Please use the suitable word provided in the round brackets.
The risk of illiquidity
(increased/decreased/did not change). The cost of illiquidity
(increased/decreased/did not change). Therefore it makes sense to
(increase/decrease/ maintain) the ESF buffer. As a result your bank will be willing to create
(more/less/the same) loans and deposits.
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