Which of the following statements is true?
I,Real Time Gross Systems (RTGS) for large value payments consume less system liquidity than Deferred Net Systems (DNS)
II,The US Fedwire is an example of a Real Time Gross System
III,Current disclosure requirements in relation to liquidity risk as laid down in the Basel framework require banks to disclose how liquidity stress scenarios were formulated
IV. A CFP (Contingency Funding Plan) provides access to Central Bank financing
Which of the following is not a possible early warning indicator in relation to the health of a counterparty?
Which of the following statements is true?
I,It is sufficient to ensure that a parent entity has sufficient excess liquidity to cover a liquidity shortfall for a subsidiary.
II,If a parent entity has a shortfall of liquidity, it can always rely upon any excess liquidity that its foreign subsidiaries might have.
III,Wholesale funding sources for a bank refer to stable sources of funding provided by the central bank.
IV. Funding diversification refers to diversification of both funding sources and funding tenors.
Which of the following statements is true in relation to collateral management?
I,A collateral management system need not consider the failure by counterparties to return collateral when due
II,The extent to which counterparties may have rehypothecated collateral is not a consideration for a collateral management system
III,Cash is an acceptable substitute for any type of collateral required to be posted
IV. Haircuts do not apply to treasury issued instruments posted as collateral
Which of the following statements is correct in relation to liquidity risk management?
I,Pricing for products that do not impact the balance sheet need not reflect the cost of maintaining liquidity
II,Time horizons for liquidity risk management are impacted by both regulatory requirements and the speed at which new sources of liquidity can be tapped
III,Collateral management is an important aspect of liquidity risk management
IV. The maturity period of various instruments in the capital structure has a significant impact on liquidity needs