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If the bank you own has no excess reserves and a sound customer comes in asking for a loan, should you automatically turn the customer
If the bank you own has no excess reserves and a sound customer comes in asking for a loan, should you automatically turn the customer down, explaining that you don't have any excess reserves to loan out? Why or why not? What options are available for you to provide the funds your customer need?
Explain how unexpected increases in interest rate hurt banks. How would they alter their basic GAP if they expected interest rates to rise?
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