Question 4

Using the following FIs Balance sheet determine what is the impact on the balance sheet if its largest customer decides to exercise a AUD 40 million loan commitment

Balance Sheet
Assets ( $ millions)		Liabilities and equity ($millions)
Cash	40	Deposits	130
Loans	120	Borrowed funds	60
Securities	90	Equity	60
Total assets	250	Total liabilities and equity	250

Show the new balance sheet values for both of these cases:

(i) asset (stored) liquidity management

ii) liability (purchased) liquidity management ( 10 marks )