Assertion (A): The Liquidity Coverage Ratio (LCR) under Basel III is intended to help banks withstand short-term liquidity stress. Reason (R): Banks are required to hold high-quality liquid assets sufficient to meet potential net cash outflows over a 30-day stress period. Which one of the following is correct?

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Economics · Banking Sector & Basel Norms

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Both A and R are correct, and R correctly explains A

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Answer 1

A is incorrect, but R is correct

Answer 2

A is correct, but R is incorrect

Answer 3

Both A and R are correct, but R does not explain A

Answer 4

Both A and R are correct, and R correctly explains A

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