Banks Have Gradually Moved to Liability Management in the Management

question 74

Multiple Choice

Banks have gradually moved to liability management in the management of their balance sheets.Which statement best describes liability management?

• A) The loan portfolio is tailored to match the available deposit base.
• B) The deposit base and other funding sources are managed in order to fund loan and other commitments.
• C) The ratio of debt to equity is managed to meet capital adequacy requirements.
• D) The liability to assets ratio is maintained within central bank standards.

---

Definitions:

Mechanistic Organization

A form of organization characterized by rigid hierarchies, high levels of formalization, and centralized decision-making, often seen in traditional, large-scale businesses.

Organic Design

A design philosophy that promotes harmony between the natural environment and human habitation, often emphasizing sustainability and fluidity.

Status Quo

The existing state or condition of affairs, often used in the context of resisting change.

Force Field Analysis

A method used to identify and evaluate the forces that support or resist a particular change or decision.