Financial Markets and Institutions Exam $28/$January$/2023$

True or false? Explain your answer and define the concepts used succinctly

Repos are risk free transactions

When a bank has sufficient capital, it can never go bankrupt

Banks are so strictly controlled $($yearly SREP, solvency, liquidity$)$ because

they have more information than the regulator

Without the interbank market, banks cannot give as much loans as with a

well$-$functioning interbankmarket

o Investors will always prefer to biy subordinated bonds rather than senior

bonds