Depository institutions do all the following EXCEPT
A) minimize the cost of obtaining funds.
B) create liquidity.
C) pool risks.
D) create required reserve ratios.

Question

Quizplus · Accepted Answer

Depository institutions are not responsible for creating required reserve ratios. This is the responsibility of the central bank, such as the Federal Reserve in the United States. Depository institutions, however, do play a vital role in the implementation of required reserve ratios by holding the required amount of reserves and managing their liquidity to ensure compliance with these ratios.

Depository Institutions Do All the Following EXCEPT