As part of the Basel III liquidity reforms the RBA will establish a secure committed liquidity facility.
A)This is necessary due to the shortage of capital required to be held by FIs.
B)This is necessary due to the shortage of Australian government debt, T-bonds and T-notes, used in open market operations.
C)This is necessary due to the shortage of international funds to purchase repos.
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

The establishment of a secure committed liquidity facility by the RBA is necessary due to the shortage of Australian government debt, T-bonds, and T-notes, used in open market operations. This facility will allow FIs to access liquidity in a secure manner in times of stress. There is no mention of a shortage of capital or international funds to purchase repos as reasons for the establishment of this facility.

As Part of the Basel III Liquidity Reforms the RBA