2. The following figures show the European Central Bank’s (ECB) balance sheet as well as the balance sheet of a commercial bank in France, Crédit Paribas Bank. Suppose the ECB wants to raise bank reserves by

€2 billion.

Assuming that Crédit Paribas Bank is the only bank that is going to undertake these transactions with the ECB, show how ECB’s as well as Crédit Paribas Bank’s balance sheet will change.

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The European Central Bank Liabilities and Assets Shareholders' Equity Treasury 3,000 billion Reserves 1,700 billion Bonds Other bonds 1,000 billion Currency 1,300 billion Total assets 3,000 billion Total 3,000 billion liabilities