Module: | Stress Scenarios & Monitoring Tools
Q10: Which of the following correctly matches the LCR "Monitoring Tool" with its function?
1. Contractual Maturity Mismatch: Identifies gaps in time buckets to assess maturity transformation.
2. Concentration of Funding: Monitors funding from significant counterparties, instruments, and currencies.
3. BLR-3 (Available Unencumbered Assets): Captures assets eligible for collateral in secondary markets/central banks.
4. BLR-4 (LCR by Significant Currency): Required for all banks, including foreign bank branches.
2. Concentration of Funding: Monitors funding from significant counterparties, instruments, and currencies.
3. BLR-3 (Available Unencumbered Assets): Captures assets eligible for collateral in secondary markets/central banks.
4. BLR-4 (LCR by Significant Currency): Required for all banks, including foreign bank branches.
✅ Correct Answer: B
Exam questions from Liquidity Coverage Ratio (LCR) often focus on reporting standards like BLR.
Contractual mismatch, funding concentration, and available unencumbered assets are standard monitoring tools.
However, foreign bank branches are exempt from BLR-4 as they do not typically hold foreign currency HQLA, a specific detail in the RBI Liquidity Framework.
Contractual mismatch, funding concentration, and available unencumbered assets are standard monitoring tools.
However, foreign bank branches are exempt from BLR-4 as they do not typically hold foreign currency HQLA, a specific detail in the RBI Liquidity Framework.