Basel III Liquidity Reforms

question 28

Multiple Choice

Basel III liquidity reforms:

• A)will strengthen global illiquidity rules with the key aim of promoting a resilient global sector
• B)introduce the need for adequate high-quality liquid assets that meet the available stable funding (ASF) requirement
• C)introduce the need for adequate high-quality liquid assets that meet the net stable funding ratio (NSFR)
• D)introduce the need for adequate high-quality liquid assets that meet the liquidity coverage ratio (LCR)

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, providing a basis for budgeting and financial planning.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output increases, usually due to inefficiencies that arise with large-scale production.

Production Volume

The quantity of products that a manufacturing system can produce over a specific period of time.

Total Cost

The complete cost of production or operation, including fixed and variable costs, associated with a business activity or process.