Question

Which of the following most accurately describes the role asset-backed commercial paper (ABCP) played in the...

Which of the following most accurately describes the role asset-backed commercial paper (ABCP) played in the financial crisis?

The decline of the ABCP market triggered a widespread run in the traditional banking system

A run in ABCP resulted in banks providing liquidity support to ABCP programs during a time when liquidity was already growing scarce

ABCP played no role in the financial crisis

A sharp increase in ABCP defaults caused heavy losses among the banks

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Ans.- (B)

the role played by asset-backed commercial paper (ABCP) in the financial crisis can be described as:A run in ABCP resulted in banks providing liquidity support to ABCP programs during a time when liquidity was already growing scarce

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