Question
a)Rank the following liabilities, with respect to funding risk (a form of liquidity risk), from 1 (Lowest risk) to 4 (Highest risk): Term deposits; Commercial
a)Rank the following liabilities, with respect to funding risk (a form of liquidity risk), from 1 (Lowest risk) to 4 (Highest risk): Term deposits; Commercial paper; Demand deposits; Interest-bearing cheque accounts(1 mark)
1.
2.
3.
4.
b)Explain how and why a bank's core deposits differ from its volatile liabilities in terms of interest elasticity.(1 mark)
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Public Finance and Public Policy
Authors: Jonathan Gruber
4th edition
1429278455, 978-1429278454
