Vault cash generally satisfies a bank's liquidity needs.

Question

Quizplus · Accepted Answer

Vault cash is a component of a bank's reserves and can be used to meet immediate cash withdrawal demands, but it may not be sufficient to satisfy all of a bank's liquidity needs, especially in times of financial stress or unusual demand. Banks also rely on other sources of liquidity, such as borrowing from other banks or the central bank, selling assets, or raising funds in the capital markets.

Vault Cash Generally Satisfies a Bank's Liquidity Needs