Which of the following is a way in which an FI can raise liquidity?
A)selling liquid assets
B)borrowing funds in money markets
C)using excess cash reserves over and above the amount held in its exchange settlement account with the RBA
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

All of the listed options are ways in which an FI can raise liquidity. Selling liquid assets, such as government securities or highly rated corporate bonds, can quickly generate cash. Borrowing funds in money markets, such as the interbank market or the repurchase agreement (repo) market, can provide short-term funding to meet liquidity needs. Using excess cash reserves over and above the amount held in its exchange settlement account with the RBA can also provide a source of liquidity.

Which of the Following Is a Way in Which an FI