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The balance sheet for Goliath Bank is given below. $ billion Assets Liabilities Loans 1,000 Deposits 700 Gov. Bonds 250 Borrowing 600 Reserves 100 Equity
The balance sheet for Goliath Bank is given below. $ billion Assets Liabilities Loans 1,000 Deposits 700 Gov. Bonds 250 Borrowing 600 Reserves 100 Equity 50 (i) Explain the process by which the actions of Goliath Bank can affect the money supply for the economy. (2 marks) (ii) Discuss the nature of any risks faced by Goliath Bank? (2 marks) (iii) Explain the role of equity in influencing the riskiness of Goliath Bank. (2 marks) (iv) Explain the role of deposit insurance in influencing the riskiness of Goliath Bank. (2 marks)
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