Use of liability management ________ bank size and so requires appropriate ________ in capital reserves.
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Question

Quizplus · Accepted Answer

Liability management increases a bank's size by allowing it to expand its asset base through additional borrowings or other liabilities, which in turn requires an increase in capital reserves to maintain a healthy capital adequacy ratio and manage the increased risk.

Use of Liability Management ________ Bank Size and So Requires