Assume the required reserve ratio on all deposit liabilities is 15%. Calculate the level of excess reserves for Sovereign Bank. How much can Sovereign Bank safely lend?

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Sovereign Bank Assets Liabilities & Equity 200,000 20,000 Borrowing from the central bank 80,000 100,000 150,000 70,000 40,000 Deposits Reserves Federal funds loans Loans Securities Other 200,000 Federal funds borrowing 300,000Other liabilities 40,000 Stockholders' equity