Economics · Banking Regulations
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: The Liquidity Coverage Ratio (LCR) requires banks to match their long-term assets with stable sources of funding to reduce their reliance on short-term funding. Reason R: The primary objective of the Liquidity Coverage Ratio (LCR) is to ensure banks maintain a sufficient stock of high-quality liquid assets to cover their short-term liquidity needs under stressed conditions. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is not correct but R is correct✓
- 2A is correct but R is not correct
- 3Both A and R are correct but R is NOT the correct explanation of A
- 4Both A and R are correct and R is the correct explanation of A
Correct answer
A is not correct but R is correct
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