Question

7. Regulators cannot impose liquidity requirements on financial institutions.

Select one

A. True

B. False

8. Only licensed banks are permitted to use the term​ 'bank' in their name.

Select one

A. True

B. False

Answer 1

7)

False. Regulators can impose liquidity requirements on financial Institutions. Liquidity coverage ratio and Net stable funding ratio are examples of liquidity requirements set by regulators

Liquidity coverage ratio conveys the bank's ability to meet short term liquidity requirements

Liquidity coverage ratio = High quality Liquid asset / Total net Cash outflows over 30 days 100%

Net stable funding ratio is a measure used to check a bank's liquidity over the longer term horizon

Net stable funding ratio = Available amount of stable funding / Required amount of stable funding 100%

8)

True. The central bank issues banking licenses to entities that are permitted to operate as banks. Even in the new fintech banks such as payment banks are required to get this license