Given the balance sheet of Bank A and Bank B below (all figures in $ million):

Bank A
Reserve 50	Transaction Deposits 200
Securities 50	Non-transaction Deposits 600
Loans to Government 900	Borrowings 100
	Equities 100
Total Assets 1,000	Total Liabilities & Equities 1,000

Bank B
Reserve 20	Transaction Deposits 200
Securities 10	Non-transaction Deposits 600
Loans to Commercial Firms 970	Borrowings 100
	Equities 100
Total Assets 1,000	Total Liabilities & Equities 1,000

1. Based on the balance sheet structure of the two banks, can we conclude that the two banks are equally safe? (10 marks)

2. Suppose both Bank A & B have given a line of credit to a corporate customer of $20 million. Show the impact on the balance sheet of both banks if the customer draws on the line of credit by writing a cheque to its supplier. Which bank will face a higher risk with respect to the off-balance sheet commitment and what kind of risk is it if the required reserve ratio is 10%? (15 marks)