Regulators cannot impose liquidity requirements on financial institutions A. True B. False

Regulators cannot impose liquidity requirements on financial institutions

A. True

B. False

Expert Solution

Answer: B: False

There are institutions specifically set up to supervise , monitor & report on the functions of various financial institutions , including banks---such as the following with fixed responsibilities entrusted to them

Federal Reserve Board(FRB)--monitors the buying/selling of US treasury securities & regulates liquidity & credit requirements.

Federal Deposit Insurance Corporation(FDIC)-- entrusted with ensuring safety & stability of the financial institutions, including customer protection

The Securities and Exchange Commission(SEC) responsible for the proper functioning of the US securities market or the stock exchange

The Consumer Financial Protection Bureau(CFPB)----responsible for making the customers /end consumers aware of the various financial products & related services available in the market.

That said,

the first one, ie. FRB--The Federal Reserve Board can impose liquidity requirements on financial institutions--as a regulatory body , that oversees the formers' activities.

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