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Assets Liability and Equity Cash 500 Deposits 4,500 T. Bills 1,000 Other Liabilities 400 Loans 4,000 Equity 600 Total Assets 5,500 Total Liabilities & Equity
Assets Liability and Equity
Cash 500 Deposits 4,500
T. Bills 1,000 Other Liabilities 400
Loans 4,000 Equity 600
Total Assets 5,500 Total Liabilities & Equity 5,500
The banks management encounters a liquidity challenge when depositors withdraw $500 million. How should the situation be managed if the size of the banks balance sheet is not to be affected? What is the opportunity cost of doing that?
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