The sources and uses of funds method of estimating a bank's liquidity requirements divides the bank's liabilities into three categories-hot money,vulnerable funds,and stable funds-and estimates the probability of each being withdrawn from the bank.

Question

Quizplus · Accepted Answer

The sources and uses of funds method does not categorize liabilities into hot money, vulnerable funds, and stable funds. Instead, it focuses on matching the timing of cash inflows and outflows to estimate liquidity needs.

The Sources and Uses of Funds Method of Estimating a Bank's