Which of the following would ‘tighten’ the liquidity situation of banks?

Question:Which of the following would ‘tighten’ the liquidity situation of banks?

1.Increased sales of government securities to individuals or institutions who pay for them from their bank

2.Regulations requiring the banks to maintain positive end-of-day balances with the Bank of England

3.Both 1 and 2

4.Lower levels of taxation and reductions in tax receipts to the Treasury

Answer:3