Which of the following is not a reason for banks to hold liquid assets?
A)To meet customers' needs for currency
B)To meet capital requirements
C)To meet required reserves
D)To compensate for correspondent bank services
E)To assist in the check clearing process

Question

Quizplus · Accepted Answer

Holding liquid assets is primarily for meeting immediate currency demands, maintaining required reserves, compensating for correspondent banking services, and facilitating the check clearing process. Meeting capital requirements, however, is more about maintaining a certain level of equity or assets relative to liabilities, rather than liquidity management.

Which of the Following Is Not a Reason for Banks