If LVTS participating financial institutions have insufficient settlement balances ________.
A) they can borrow from each other in the pre-settlement trading period at the bank rate
B) they can borrow from each other in the pre-settlement trading period at the overnight rate
C) they can borrow from the Bank of Canada
D) B and C only.

Question

Quizplus · Accepted Answer

When LVTS participating financial institutions have insufficient settlement balances, they have two main options: they can borrow from each other in the pre-settlement trading period at the overnight rate, or they can borrow from the Bank of Canada. This ensures liquidity and smooth operation within the system.

If LVTS Participating Financial Institutions Have Insufficient Settlement Balances ________