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Consider a bank with the following balance sheet: $10 Assets Required reserves $10 Excess reserves $22 Loans $75 million million million Liabilities Checkable deposits $120
Consider a bank with the following balance sheet: $10 Assets Required reserves $10 Excess reserves $22 Loans $75 million million million Liabilities Checkable deposits $120 million Bank capital - $13 million Assume that required reserves are 8%. In order to avoid insolvency, regulators decide to provide the bank with $23 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $20 million in deposits is withdrawn. Show the effects of the capital injection and bank run on the balance sheet. (Round your responses to the nearest whole number.) Assets Required reserves $ Excess reserves $1 Loans million million million Liabilities Checkable deposits $1 Bank capital $1 million million Consider a bank with the following balance sheet: $10 Assets Required reserves $10 Excess reserves $22 Loans $75 million million million Liabilities Checkable deposits $120 million Bank capital - $13 million Assume that required reserves are 8%. In order to avoid insolvency, regulators decide to provide the bank with $23 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $20 million in deposits is withdrawn. Show the effects of the capital injection and bank run on the balance sheet. (Round your responses to the nearest whole number.) Assets Required reserves $ Excess reserves $1 Loans million million million Liabilities Checkable deposits $1 Bank capital $1 million million
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