In 2023, Pacific Crest Bank experienced an abrupt collapse after panicked depositors used online banking portals to rapidly withdraw billions of dollars in deposits, fearing the institution lacked sufficient cash to cover its short-term obligations. What type of microprudential financial regulation is specifically designed to reduce the risk of this type of liquidity crisis?
Implementing stricter market competition policy among commercial lenders
Decreasing the central bank's base policy rate of interest
Requiring banks to hold a higher proportion of their assets as high-quality liquid assets (HQLAs)
Increasing the capital adequacy ratio to limit long-term investment risk
