5 Questions
Which of the following is a key question and main goal in managing non-deposit liabilities in financial institutions?
What can banks do when deposit volume is inadequate to support their desired loans and investments?
What is the relationship between loans and deposits in the context of liability management?
Deposits are used to make loans.
What does bank management do when deposit volume is inadequate to support all loans and investments?
Seek out the lowest-cost source of borrowed funds.
What is the priority for a lender in the context of liability management?
To make loans to customers with positive net earnings.
What is the term used to describe alternative non-deposit sources of funding mentioned in the text?
Shadow banks
Test your knowledge on the management of non-deposit liabilities in financial institutions. Explore alternative sources of funding, including shadow banks, and learn how banks manage their liabilities when deposit volumes are insufficient.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
