If households and businesses lend their surplus cash directly to borrowers, there would be no need for financial institutions. Discuss the relevance of financial institutions with reference to this statement. (10 marks) Describe four (4) categories of bank regulations that are established to deal with financial instability within the banking system. (8 marks) Identify the major types of Off-Balance Sheet (OBS) activities engaged by a financial institution and discuss what a FI hopes to achieve with the use of OBS activities. (10 marks) Discuss the competitive landscape of the banking system in the Caribbean. (12 marks) Discuss the factors causing global banks to reduce correspondent banking relationships with Caribbean banks. (12 marks) (a) Explain liquid asset management as it relates to a financial institution (4 marks) (b) Explain the risk-return trade-off for liquid assets. (4 marks)