Explanation:
The correct answer is D.
Global banks operate with a centralized approach to managing liquidity, maturity, and currency mismatches. They view risk on a consolidated global entity basis rather than isolating risk per individual local office (Statement A is true). To facilitate this, they operate numerous offices across multiple jurisdictions (Statement B is true). Furthermore, a significant mismatch in one local office's balance sheet is typically offset or hedged via internal transfers, utilizing on-balance sheet positions booked by another office within the same global network (Statement C is true). Because all three statements accurately describe the structural operations of a global bank's balance sheet, "All of the above" is the correct response.
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Q.4171 The following statements are about the structure of bank operations in long and short of the banks’ global balance sheets. Which one is most definitely TRUE?
A
Banks management of maturity and currencies are based on a consolidated global entity instead of per office.
B
Banks actively operating across the world have numerous offices in various countries.
C
Significant mismatches measured on an office’s balanced sheet located in a different office may be offset/hedged off-balance sheet through an on-balance sheet position booked by other offices elsewhere
D
All of the above
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