A bank's current balance sheet is as follows:

 

 

If deposits are expected to be withdrawn by $3 million. What will be the new balance sheet of the bank if a stored liquidity management strategy is adopted?

Transcribed Image Text:

Assets Cash Required Reserves Loans Total $2 million $10 million Liabilities and Equity Deposits Long-term Debt Equity $12 million Total $8 million $2 million $2 million $12 million Assets Cash Required Reserves Loans Total $2 million $10 million Liabilities and Equity Deposits Long-term Debt Equity $12 million Total $8 million $2 million $2 million $12 million

Answer rating: 100% (QA)

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