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Please answer the following questions

based on Chapter 12 "Liquidity Risk":


What are the causes of liquidity risk for financial institutions?

 

What are the consequences of extreme liquidity risk?  In your view after studying this chapter, what are the key measures of reducing the extreme liquidity risk for depository institutions?


can you give at least three examples for the sources and uses of "liquidity" for a depository institution (i.e., three examples for the sources of liquidity, and three examples for the uses of liquidity)?


What is "liquidity planning"?  what are the key components in order to make good job at liquidity planning?


What are the "bank runs"?what factors could contribute to "bank runs" (provide at least three factors)?  What role have "discount window" and "deposit insurance" played in preventing bank runs? Can they (i.e., discount window and deposit insurance) totally eliminate the risk of bank runs, why or why not?

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1.Causes of Liquidity risk for Financial institutions : Liquidity risk arises for two reasons ,one is Asset side reason and... View the full answer

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