What is a possible downside for a bank

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Reference no: EM133081056

What is a possible downside for a bank to have too much liquidity in the form of reserves?

Group of answer choices

The bank would encounter a problem if many customers came to withdraw their funds.

Reserves are assets that generate very little income as opposed to securities or loans.

A bank holding too many excess reserves may be sanctioned by the central bank.

Reference no: EM133081056

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