Which of the following methods may be more problematic to use in the future because banks may no longer be allowed to net loans against deposition positions as per Basel III? a

Marketing Jan 12, 2021

Which of the following methods may be more problematic to use in the future because banks may no longer be allowed to net loans against deposition positions as per Basel III?

a. Giro systems

b. Overdraft banking

c. Bilateral netting

d. Notional pooling

Expert Solution

d. Notional pooling

Explanation:

The reason for this is that in Notional pooling one is able to use both edit and credit balances to determine interest owed, if banks are no longer able to net the two together this can pose for problematic banking as interest would need to. be recalculated just on the outstanding balance and not netted against deposits.

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