Banks can lower their liquidity risk by having more __________ on their balance sheet.

Question

Quizplus · Accepted Answer

Government securities are considered to be highly liquid assets that can provide a stable source of funding for banks. In times of financial stress, banks can easily sell these securities in the market to meet their obligations. This helps to lower their liquidity risk. Transactions deposits and savings deposits are liabilities for the bank, and loans are assets that may not be very liquid.

Banks Can Lower Their Liquidity Risk by Having More __________