pour clated to RUE Question 28 1p First National Bank Assets Liabilities Reserves- $20 Deposits- $80 million million Loans- $80 million Bank Capital $20 million The table above shows the Balance Sheet of First National Bank. Suppose it finds out that loans of $30 million are worth nothing and has to be deducted from their asset. Does this bank become insolvent (government regulators has to close the bank) as a result? No, because it has still enough cushioning from the loans outstanding obstanding Yes, because it crosses the threshold of $20 million, Yes, because the Bank Capital becomes negative no, because it can still borrow to increase its reserves