Stored liquidity management is:
A)a liability-side adjustment to the balance sheet to cover a deposit drain
B)an asset-side adjustment to the balance sheet to cover a deposit drain
C)an equity-side adjustment to the balance sheet to cover a deposit drain
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

Stored liquidity management is an asset-side adjustment to the balance sheet to cover a deposit drain. It involves maintaining a portfolio of highly liquid and marketable assets that can be quickly sold to generate cash to cover unexpected deposit withdrawals. This helps a bank to ensure it is able to meet its short-term cash requirements and maintain its liquidity.

Stored Liquidity Management Is