Basel III liquidity reforms costs are:
A)reduced profitability due to more liquid balance sheets
B)reduced impact of the liquidity coverage ratio and net stable funding ratio on credit unions and building societies
C)competitiveness of Australian banks will be negatively impacted if other countries do not take up the reforms
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

Option A is correct because the Basel III liquidity reforms require banks to maintain more liquid assets, which can reduce profitability due to the lower return on these assets.

Option B is correct because credit unions and building societies have been given more lenient liquidity requirements under the Basel III reforms, which reduces the impact of the liquidity coverage ratio and net stable funding ratio on them.

Option C is correct because if other countries do not adopt the Basel III liquidity reforms, Australian banks may be put at a competitive disadvantage since they will have to comply with stricter liquidity requirements.

Basel III Liquidity Reforms Costs Are