VRB Training 2023 _ LR quizz

Value of ASF and RSF in calculating NSFR is:

• Market value

• Carrying value

• Fair value

• Intrinsic value

Which of the following do NOT include the Small business customer in LCR?

• Stable deposit with run-off factor of 5%

• Less stable deposit with run-off factor of 10%

• Stable deposit with run-off factor of 3%

Which of the following do NOT include in calculating the Cash Inflows for LCR?

• Interest payments

• Derivative cashflow

• Operational deposits

• Insurance claims

Which of the following is NOT a characteristic of stable funding sources for the NSFR calculation?

• Longer maturity

• Low potential for early withdrawal

• Higher interest rate

• Reliable availability during stress periods

What is the main purpose of a contingency funding plan?

• To ensure sufficient liquidity during times of financial stress or disruption

• To maximize profits through strategic investments

• To optimize cash flow for day-to-day operations

• To set up a ‘crisis team’ with clear role and responsibilities

Why is it important for banks to regularly review and update their contingency funding plans?

• To align with changing business conditions and market dynamics

• To satisfy regulatory requirements and compliance standards

• To incorporate lessons learned from previous crises or disruptions

• All of the above

Which of the following assets are considered high-quality liquid assets (HQLA) for the purpose of calculating the LCR?

• Cash and cash equivalents

• Government securities

• Highly rated corporate bonds

• Gold

Which of the following factors may be considered when designing liquidity stress scenarios?

• Sudden deposit withdrawals by customers

• Market disruptions or liquidity freezes

• Changes in interest rates

• All of the above

What is the minimum NSFR requirement set by the Basel III framework for internationally active banks?

• 40%

• 50%

• 65%

• 100%

How does the NSFR differ from the Liquidity Coverage Ratio (LCR)?

• The NSFR focuses on short-term liquidity, while the LCR assesses long-term funding stability.

• The NSFR considers both assets and liabilities, while the LCR focuses on cashflows.

• The NSFR requires a maximum stable funding ratio of 100%, while the LCR requires a minimum liquidity coverage ratio of 100%.

• The NSFR is a globally recognized standard, while the LCR is specific to certain regulatory jurisdictions.