Podcast
Questions and Answers
What is the main aim of asset management for a commercial bank?
What is the main aim of asset management for a commercial bank?
- Minimizing the cost of funds
- Increasing the required reserve ratio
- Minimizing the deposit outflow
- Maximizing the return on funds (correct)
What does liquidity management aim to ensure for a commercial bank?
What does liquidity management aim to ensure for a commercial bank?
- Complete elimination of excess reserves
- Zero reserves for maximum flexibility
- Maximum profit generation
- The ability to pay off liabilities in case of deposit outflow (correct)
What is the key factor in ensuring liquidity for a commercial bank?
What is the key factor in ensuring liquidity for a commercial bank?
- Complete elimination of excess reserves
- Zero reserves to maximize flexibility
- Maximizing the required reserve ratio
- Keeping part of deposits as liquid money (correct)
What is the purpose of liability management for a commercial bank?
What is the purpose of liability management for a commercial bank?
What is determined by the required reserve ratio for a commercial bank?
What is determined by the required reserve ratio for a commercial bank?
What is further decided by the manager of a commercial bank in relation to liquidity management?
What is further decided by the manager of a commercial bank in relation to liquidity management?
What is the formula for calculating excess reserves (ER)?
What is the formula for calculating excess reserves (ER)?
What is the primary concern of liquidity management in a bank?
What is the primary concern of liquidity management in a bank?
What happens if a bank faces a liquidity shortage?
What happens if a bank faces a liquidity shortage?
What is the best solution for covering a liquidity shortage according to the text?
What is the best solution for covering a liquidity shortage according to the text?
What does the required reserve ratio represent?
What does the required reserve ratio represent?
How is excess reserve ratio different from required reserve ratio?
How is excess reserve ratio different from required reserve ratio?
How does a deposit outflow affect a bank's balance sheet?
How does a deposit outflow affect a bank's balance sheet?
What happens when a bank borrows from the central bank to cover a liquidity shortage?
What happens when a bank borrows from the central bank to cover a liquidity shortage?
What is considered as a worst solution for covering a liquidity shortage according to the text?
What is considered as a worst solution for covering a liquidity shortage according to the text?
What are considered as secondary reserves according to the text?
What are considered as secondary reserves according to the text?
