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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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