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Consider a bank with the following balance sheet: Assets Required reserves $11 Excess reserves $36 Loans $80 million million million Liabilities Checkable deposits $140 million
Consider a bank with the following balance sheet: Assets Required reserves $11 Excess reserves $36 Loans $80 million million million Liabilities Checkable deposits $140 million Bank capital - $13 million Assume that required reserves are 8%. In order to avoid insolvency, regulators decide to provide the bank with $29 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $35 million in deposits is withdrawn.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.) Liabilities Assets Required reserves $ million $ million Checkable deposits Bank capital Excess reserves $ million $ million Loans million
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