Suppose there is a 10% reserve requirement, and the bank has the following Balance Sheet Reserves Loans Securities Assets 55 M 250 M 45 M Deposits Bank Capital Liabilities 350 M 50 M Now, let's suppose there is a deposit outflow of $60 million. If the bank only finances its reserve shortages by borrowing from the Federal Reserve, show the bank's balance sheet after the deposit outflow and receiving the loan from the Fed.
Suppose there is a 10% reserve requirement, and the bank has the following Balance Sheet Reserves Loans Securities Assets 55 M 250 M 45 M Deposits Bank Capital Liabilities 350 M 50 M Now, let's suppose there is a deposit outflow of $60 million. If the bank only finances its reserve shortages by borrowing from the Federal Reserve, show the bank's balance sheet after the deposit outflow and receiving the loan from the Fed.
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 17CQ
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