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For each of the following bank activities, identify and describe the potential liquidity risk: a)Providing a customer with a credit card. b)Creating a Special Purpose
For each of the following bank activities, identify and describe the potential liquidity risk:
a)Providing a customer with a credit card.
b)Creating a Special Purpose Vehicle that issues Asset Backed Commercial Paper backed by mortgages originated by the bank.
c)Taking a long futures position on an organised exchange.
d)Transacting in OTC derivatives where collateral agreements have been put in place to mitigate credit risk.
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