You are the bank's liquidity manager. If the liquidation cost of highly non-liquid assets decreases, the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it you can [C] the ESF buffer. As a result, your bank will provide [D] liquidity transformation for society.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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You are the bank's liquidity manager. If the liquidation cost of highly non-liquid assets decreases, the risk of illiquidity [A] and the cost of illiquidity [B]. Therefore, it you can [C] the ESF buffer. As a result, your bank will provide [D] liquidity transformation for society.

 

C and D are

 

increase, the same

 

decrease, the same

 

increase, less

 

decrease, more 

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