Explanation:
The statement 'None of the above' is false because all the given choices (A, B, and C) are true. Institutions should align their CFP stress scenarios to those in its liquidity stress testing framework. The scenarios should also align to those in other frameworks such as the recovery and resolution plans. The liquidity stress testing scenarios should cover both systemic and institution-specific risks. Therefore, the assertion that none of the above statements are true is incorrect.
Choice A is incorrect. Institutions should indeed align their Contingency Funding Plan (CFP) stress scenarios with those in its liquidity stress testing framework. This alignment ensures that the institution is prepared for potential liquidity stresses and can respond effectively.
Choice B is incorrect. The statement is true as the scenarios should align with other frameworks such as recovery and resolution plans. This alignment provides a comprehensive view of potential risks and ensures that all aspects of risk management are considered in the planning process.
Choice C is incorrect. The liquidity stress testing scenarios should cover both systemic and institution-specific risks.
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Q.4078 Which among the following choices is FALSE about scenario and liquidity gap analysis, a key component of the CFP framework?
A
Institutions should align their CFP stress scenarios to those in its liquidity stress testing framework.
B
The scenarios should align to those in other frameworks such as the recovery and resolution plans
C
The liquidity stress testing scenarios should cover both systemic and institution-specific risks
D
None of the above
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