LVTS participants with positive settlement balances at the end of the day ________.
A) are paid the bank rate
B) are paid the overnight rate
C) are paid the bank rate less 50 basis points
D) are paid the prime rate

Question

Quizplus · Accepted Answer

LVTS participants with positive settlement balances at the end of the day are paid the bank rate less 50 basis points. This is a standard practice to encourage banks to lend excess funds rather than hold them.

LVTS Participants with Positive Settlement Balances at the End of the Day