Scenario

Frayer Bank typically has an abundance of funds in its accounts, but out of nowhere,

Borrowing Method

several investors come to the bank looking to borrow a total of $$45$ million in funds that

Repurchase Agreements

the bank simply does not have. The bank wants a temporary source of funds for two weeks and doesn't want to borrow from the federal funds market or a source outside of the United States.

First Guaranty Bank wants to borrow funds to purchase a $$22$ million building for its new branch location and wants to issue long$-$term securities to cover the financing of the new branch location.

Flow Financial Bank wants to temporarily sell $$100$ million worth of its Treasury bills, with Bank Capital an agreement to buy them back in one year for $$102$ million.

Diligence Bank has a shortage of funds and wants a temporary source of funds for two days to make up the difference. They have great relationships with banks outside of the United States and want to borrow funds from Deutsche Bank in Germany.

True or False: The majority of all United States bank liabilities are made up of sources other than deposit accounts.

True

False

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