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Explanation:
Compared to Advanced Economy (AE) banks, Emerging Market Economy (EME) banks typically have a different liability structure heavily reliant on customer deposits, particularly demand and savings deposits, due to less developed capital markets and limited access to long-term wholesale funding. Therefore, EME banks rely more on demand deposits as a primary source of funding, while AE banks often have broader access to wholesale funding and interbank lending markets.
Q.29 Which of the following best describes a key difference in the liability structure of EME banks compared to AE banks?
A
EME banks rely more on wholesale funding.
B
EME banks rely more on demand deposits.
C
EME banks rely more on time deposits.
D
EME banks rely more on interbank lending.
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