Which of the following statements about the changing composition of liabilities for large commercial banks is true? Since the 1960s, large commercial banks
A)have decreased their reliance on nondeposit liabilities.
B)have increased their reliance on nondeposit liabilities as a source of funds.
C)have reduced their use of the fed funds market.
D)have increasingly relied on transactions deposits as a growing proportion of their total liabilities.

Question

Quizplus · Accepted Answer

Large commercial banks have increased their reliance on nondeposit liabilities as a source of funds since the 1960s. This is due to the growth of money market mutual funds and other forms of short-term borrowing. However, they have also increased their use of transactions deposits as a growing proportion of their total liabilities.

Which of the Following Statements About the Changing Composition of Liabilities