During a liquidity crisis, an FI may have to borrow additional funds at higher rates as the supply of funds becomes restricted.

Name: During a liquidity crisis, an FI may have to borrow additional funds at higher rates as the supply of funds becomes restricted.
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During a liquidity crisis, the supply of funds becomes restricted, which can lead to an increase in borrowing costs for FIs. Therefore, they may have to borrow additional funds at higher rates to overcome the liquidity shortfall.

During a Liquidity Crisis, an FI May Have to Borrow