Below are Victoire Bank$$s assets and liabilities $($in millions of Cedis$)$ for the year $2021$

Reserves $$ Ghs $140,000$

Loans $$ Ghs $420,000$

Securities $$ Ghs $120,000$

Deposits $-$ Ghs $640,000$

Bank capital $$ Ghs $60,000$

Trade income Allowance $-$ Ghs $20,000$

$$

Create a simple balance sheet for Victoire Bank with the information provided above.

$$Would you say is that the bank is liquidity oriented or profitability focused? Why? $$

Determine the required reserve and the excess reserves $($The minimum reserve requirement by the central bank is assumed to be $20\%).$

Why do banks keep excess reserves?

Construct a revised balanced sheet for the bank after a customer withdraws Ghs $128,000$ from his account with Victoire Bank.

The bank decides to obtain the funds to meet the reserves by borrowing from the Central Bank, from other banks, and by selling portion of its securities in the ratio $3$:$2$:$1,$ respectively. Using a simple balance sheet show how the bank will at a minimum, meet the required reserve.

Is it important for Victoire Bank to hold a high level of reserves? What would be the implications of holding too little versus too high excess reserves?