A minimum liquidity requirement means that a bank must:
A) cover short-term demands for funds by customers.
B) meet their capital adequacy targets.
C) keep their exchange settlement accounts with a positive balance.
D) ensure they receive the highest possible return from customer deposits.

Question

Quizplus · Accepted Answer

A minimum liquidity requirement means that a bank must have enough liquid assets to cover short-term demands for funds by customers. This is important to ensure that the bank can meet their obligations to customers and maintain confidence in the banking system.

A Minimum Liquidity Requirement Means That a Bank Must