The risk that a credit union will experience an unanticipated wave of withdrawals without an offsetting amount of new deposits is ____ risk.
A) credit (default)
B) interest rate
C) liquidity
D) exchange rate
E) none of the above

Question

Quizplus · Accepted Answer

Liquidity risk is the risk that a credit union will not be able to meet its financial obligations due to a sudden surge in withdrawals without enough new deposits to offset them. This risk can be mitigated by maintaining adequate reserves and managing the credit union's asset and liability mix.

The Risk That a Credit Union Will Experience an Unanticipated