What are the two major liquidity risk insulation devices available?
A)Deposit insurance and discount window.
B)Liquidity planning and maturity ladder.
C)Scenario analysis and liquidity index.
D)Financing gap and the financing requirement.

Question

Quizplus · Accepted Answer

Deposit insurance and discount window are two major liquidity risk insulation devices. Deposit insurance protects depositors from losses in the event of a bank failure, while the discount window allows banks to borrow from the central bank to meet short-term liquidity needs.

What Are the Two Major Liquidity Risk Insulation Devices Available