Which of the following statements is true?
A) In case of a liquidity crisis, depositors do not need to worry as the RBA will pay out any deficit balances.
B) In case of a liquidity crisis, any available balances will be divided equally among depositors.
C) In case of a liquidity crisis, any available balances will be divided proportionally to each depositor's investment.
D) In case of a liquidity crisis, the 'first comes, first serves' principle holds.

Question

Quizplus · Accepted Answer

In a liquidity crisis, banks typically operate on a 'first come, first served' basis, meaning those who withdraw their funds first are more likely to receive their money.

Which of the Following Statements Is True