At times, someone with a good credit rating may not be able to get a loan. When this happens, the potential customer may be told

Question

3 years ago

5

At times, someone with a good credit rating may not be able to get a loan. When this happens, the potential customer may be told

to try again in the near future. What does this tell you about the bank’s reserves? How should the customer react to a situation like this?

Business

1 answer:

Sergio [31] · Answer 1 · 2022-05-29T19:45:47+03:00

It can mean that the bank is running low on liquidity of cash. In the banks are required to keep a minimum of liquidity to be able to give loans and keep the cash flow. In case the bank is running low on liquidity the customer should inform the central bank and the central bank should fine the bank for not maintaining the liquidity.