What are the two main liquidity facilities available to Australian FIs to prevent financial disturbances occurring?
A) Deposit insurance and the discount window.
B) Intra-day repurchase agreement and overnight repurchase agreement.
C) Financing gap and the financing requirement.
D) Secondary credit and seasonal credit.

Question

Quizplus · Accepted Answer

Intra-day and overnight repurchase agreements are the two main liquidity facilities available to Australian financial institutions to prevent financial disturbances from occurring. These facilities allow FIs to access short-term liquidity and meet their funding requirements. Deposit insurance is a mechanism to protect depositors in case of a bank failure, while the discount window is a facility provided by central banks to lend money to commercial banks. Financing gaps and financing requirements are not liquidity facilities provided by central banks to FIs. Similarly, secondary credit and seasonal credit are facilities provided by the US Federal Reserve and are not relevant to Australia.

What Are the Two Main Liquidity Facilities Available to Australian