Draw a T-account of a bank with $10 million in deposits, with a 10% reserve ratio. Continuing from above, show the T-Account if the bank lends out $4 million and has $2 million in securities. Suppose that of the $4 million in loans of the above bank, $2 million were to mortgages that went into foreclosure and the bank confiscated the houses, but they only now have a value of $1 million. Draw this new T-Account.

What are some ways that banks can deal with the above issue (Liabilities > Assets)?