easy · FRM Part 2 Liquidity & Treasury Risk
What does 'Pre-positioned' collateral mean in the context of a central bank facility in the CFP?
- A list of assets the bank has printed on a physical piece of paper is not an operational arrangement.
- Collateral that the bank plans to purchase on the open market once a liquidity crisis has already begun.
- Any asset that the bank's CEO or CFO personally believes could be converted into usable money if a crisis ever emerged.
- Collateral that has already been legally pledged and operationally delivered to the central bank's account.
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