How would one categorize government and semi-government securities?

Government and semi-government securities are categorized as High Quality Liquid Assets because they are considered to have a very low risk of default and are easily tradable in the market. These securities, which include government bonds and treasury bills, are backed by the full faith and credit of the issuing authority, typically a government. This backing provides assurance to investors regarding the safety of their principal investment, making these securities highly liquid as they can be quickly converted to cash without significant loss of value.

In the context of liquidity regulations and risk assessments, institutions often hold high-quality liquid assets to meet their obligations during times of financial distress. The classification as liquid assets plays a significant role in maintaining the stability of financial institutions, as it ensures they can meet short-term liabilities, thereby contributing to overall market confidence.

Other categories such as high-risk investments do not apply to these securities due to their low risk profile, while high yield assets are typically associated with greater risk and potentially higher returns. Long-term securities refer to the maturity structure of the investments but do not encompass the quality or liquidity factor which is paramount in categorizing government and semi-government securities as High Quality Liquid Assets.