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LSR is a mismatch on bank’s balance sheets. What is the meaning of ‘L’ in ‘LSR’?

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LSR is a mismatch on bank’s balance sheets. What is the meaning of ‘L’ in ‘LSR’?
1). Least
2). Liquidity
3). Legal
4). Low

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Answered by on | Votes 0 |
  • LSR stands for Liquidity Stress Ratio (LSR).
  • LSR is the ratio of potential money outflow to the actual money inflow during a certain period.
  • LSR calculates the liquidity shortfall, a mismatch in the bank’s balance sheets of a Bank Holding Company (BHC) during the financial crisis.
  • LSR is used to describe the liquidity condition of the banking sector and may offer an early warning signal of a liquidity or financial crisis.

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