The minimum liquidity requirement means that a bank:
A) must never have a certain minimal reserve level of highly liquid assets.
B) must always maintain a certain minimal reserve level of highly liquid assets.
C) must always maintain a certain minimal reserve level of low liquid assets.
D) must always maintain a certain minimal number of highly important customers.

Question

Quizplus · Accepted Answer

The minimum liquidity requirement means that a bank must always maintain a certain minimal reserve level of highly liquid assets. This is to ensure that the bank has enough assets to cover any unexpected withdrawals or outflows of funds. Non-compliance with the minimum liquidity requirement can lead to penalties or regulatory action.

The Minimum Liquidity Requirement Means That a Bank