2 Examine the balance sheets of a typical commercial bank in a less developed country—say India—and that in a rich country—the UK.

What differences do you find in the asset and liability sides of the balance sheets in the two cases? Comment on the relative importance of public sector bonds in the two cases. Suppose a similar stabilisation policy —consisting of lowering of government expenditure—is being followed in both countries. Do you think there will be differential impacts on the balance sheets of the two banks? Why?