Identify at least three options available to a bank's liquidity management division when an unexpected shortfall in reserves occurs. You may use figures or T-tables to illustrate your understanding. The reserve requirement is set at 10%.
Three options which are available to the liquidity management division of a bank to counter an unexpected shortfall in the Reserve by-
A. Receipts of new consumer deposits and selling of the marketable securities in the market in order to generate the liquidity
B. Banks can also look for generating money by selling in the money market because money market will be offering with the short term funds like banks can use certificate of deposits and commercial papers.
C. Revenues can also be generated by selling of the non deposit services by these banks and this will be offering in liquidity improvement for the bank.
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