FRM Part II · FRM Exam Part II · Intraday Liquidity Risk Management
Which of the following is an intraday liquidity source rather than a use?
Receiving payments from other banks through the payment system is an intraday liquidity source because it increases the bank's available balance. Sending payments, posting collateral and giving intraday credit to clients all use up liquidity.
- ASettling a customer's large-value payment instruction
- BPosting additional collateral to a central counterparty
- CReceiving payments from other banks within the payment systemCorrect
- DExtending intraday credit to a correspondent banking client
Explanation
Incoming payments increase the bank's balance and so are a source. Sending payments, posting collateral and extending credit to clients all consume liquidity.
Did you get it right without looking?
One question tells you little. A timed set on Intraday Liquidity Risk Management shows your real accuracy, how long you take and where you lose marks.
More Intraday Liquidity Risk Management questions
- A bank's treasurer reviews intraday stress scenarios. Which design best follows the principle that a bank should be able to deal with unexpe…
- A bank participates in a real-time gross settlement (RTGS) system. Which statement best describes how payments are settled in such a system?
- At the start of a day, Bank Alpha holds 400 million in its central bank account and has an unused collateralised intraday credit line of 250…
- A bank's treasurer is reviewing the bank's intraday liquidity framework against the BCBS monitoring tools and principles. Which of the follo…
- A bank settles FX trades through CLS. Its CLS pay-in schedule requires funding in several currencies at set times. Pay-ins for the bank's EU…
- A bank settling in an RTGS system begins the day with a reserve balance of 200 million. During the morning it sends payments of 500 million …