Consider the balance sheets of Bank A and Bank B. If reserve requirements were 10 percent of transaction deposits and both banks had equal access to the interbank market and funds from the Federal Reserve, which bank do you think faces the greatest liquidity risk? Explain youranswer.

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Bank A (in mifions) Bank B (n milians) Assets Liabilities Assets Liabilities Reservs 50Transactions Deposits $200 Rervs 30Trans actions Deposits $200 Loans $920 Nontransactions Deposts $600 Loans $920 Nontransactions Deposits $600 Securities 250 Borowings S100 Secunities Borrowings S100