1. You are the bank's liquidity manager. If borrowed liquidity becomes more expensive, the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it makes sense to [C] the ESF buffer. As a result, your bank will provide [D] liquidity transformation for society.

B and D are

		increased, less
		maintain, less
		maintain, the same
		increased, more

2. You are the bank's liquidity manager. If the RBA increased the cash rate (overnight interbank borrowing rate), the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it makes sense to [C] the ESF buffer. As a result, your bank will be willing to create [D] loans and deposits.

B and D are

		increased, the same
		increased, less
		did not change, less
		did not change, the same