Question: please help me!!!!!!!!!!!!!!!!!!! 8. 15 points. T account problem. Suppose a bank has the following balance sheet. Assume there are no capital requirements, but that
please help me!!!!!!!!!!!!!!!!!!!

8. 15 points. T account problem. Suppose a bank has the following balance sheet. Assume there are no capital requirements, but that there is a 20% reserve requirement. (15 points). Show calculations of required and excess reserves when answering Assets Liabilities Reserves 110M Deposits 445M Loans 340M Bank Capital 55M Securities 50M A) If the bank experiences a deposit withdrawal of $20 million, what happens to its balance sheet at first in terms of the items listed above? In the above table cross out the amounts that change and write in the new balance sheet number. Does the bank have sufficient reserves to meet the reserve requirement? If not, name one plausible action it can take to meet the requirement. B) Suppose the bank experiences an additional deposit withdrawal of $20 million on top of what happened in (a), what does its balance sheet look like immediately after the second withdrawal? Draw a new balance sheet below with the items listed and the new amounts. Put in the levels of each balance sheet item (that is list the amount of reserves, loans, securities, deposits, and bank capital. Does the bank have sufficient reserves to meet the reserve requirement? If not, calculate by how much and name one plausible action it can take to meet the requirement
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
