The Basel Committee recommends that banks use a set of early warning indicators in order to identify emerging risks and potential vulnerabilities in its liquidity position.
Which of the following is not an early warning indicator of a potential liquidity problem?
A. Rapid asset growth
B. Negative publicity
C. Credit rating downgrade
D. Increased asset diversification
Explanation: Rapid asset growth, negative publicity, and credit rating downgrade are all early warnings of a potential liquidity problem.
In creased asset diversification is not an early warning indicator of liquidity.