Question
Once again consider the following simple balance sheet. Assets $m Liabilities $m Reserves 45 Deposits 300 Loans 250 Capital 20 Securities 25 Say this bank
Once again consider the following simple balance sheet.
| Assets | $m | Liabilities | $m |
| Reserves | 45 | Deposits | 300 |
| Loans | 250 | Capital | 20 |
| Securities | 25 |
Say this bank experiences a withdrawal of $30m. Restate the balance sheet to show the effect of the outflow, and determine the new required reserve. Does the bank have sufficient reserves? Explain your answer.
| Assets | $m | Liabilities | $m |
| Reserves |
| Deposits |
|
| Loans |
| Capital |
|
| Securities |
|
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Foundations Of Financial Management
Authors: Stanley Block
8th Canadian Edition
0070965447, 9780070965447
