.He said the banking system could lose deposits in several ways. 'One channel in recent quarters has been domestic fund managers allocating away from cash and deposits to other asset classes - particularly overseas assets, Mr Jolly said Source: Banks face cash squeeze as fund managers, households draw deposits (AFR, 15.07.2018) This quote contains some misleading statements. The following questions will help you to get a deeper understanding. These tasks are also exam relevant. Assets ESF OZ Bank Liabilities and equity AUD 810m AUD 150m Deposits Loans AUD 850m Deposits Fund Manager AUD 100m Household AUD 50m Equity AUD 40m Assets Deposits at OZ Bank Fund Manager Liabilities and equity AUD 100m AUD 100m Equity Assets ESF Loans Bank B Liabilities and equity AUD 700m AUD 100m AUD 100m Deposits AUD 900m Deposits Mr Red. Equity AUD 200m a) Fund manager buys AUD 100m bonds from Mr. Red using his deposits. Mr Red has his deposit account at Bank B. Show all resulting changes on the balance sheet of OZ Bank, Fund Manager, and Bank B What happens to the ratio of loans to deposits in the banking system? b) Mr. Red uses his newly acquired deposits to repay his loan at Bank B. Show the impact on Bank B's balance sheet. What happens to the ratio of loans to deposits in the banking system? c) OZ Bank is issuing AUD 50m bonds and the buyers happen to be OZ bank customers. Add the changes to OZ Bank's balance sheet