Economics · Banking and Finance
What does a commercial bank primarily do to meet temporary liquidity requirements if it has no excess reserves?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Increase the lending rate for current borrowers
- 2Forcefully ask existing clients to repay loans early
- 3Borrow reserves from other banks or the central bank✓
- 4Stop all client transactions immediately
Correct answer
Borrow reserves from other banks or the central bank
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