A committed liquidity facility is a:
A)facility that allows the FI to access funds from the RBA to obtain liquidity to meets its settlement needs
B)liquidity facility that allows the FI to access funds from the RBA to obtain liquidity to meets its short-term needs
C)liquidity facility that allows the FI to access funds from the RBA to obtain liquidity to meets its long-term needs
D)facility providing a secured line of credit from the RBA to allow access to liquid assets to meet Basel III liquidity reforms

Question

Quizplus · Accepted Answer

A committed liquidity facility (CLF) is essentially a type of secured line of credit provided by a central bank (such as the Reserve Bank of Australia, RBA) to financial institutions. It is designed to ensure that banks have access to liquid assets, helping them to meet the liquidity requirements set out under the Basel III regulatory framework, which includes standards for liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).

A Committed Liquidity Facility Is A