The bank you own has the following balance sheet: Assets: Reserves Securities Loans $80 million 50 million 620 million Liabilities: Deposits Borrowings Bank capital $600 million 50 million 100 million a) If the required reserve ratio is 10% What is the new balance sheet if there is an unexpected deposit outflow of $50 million? Answer: Reserves = Deposits = New Total Assets = and Total Liabilities & Capital = b) If the banker decides the reserve level is too low, what possible steps is the manager able to take to change the situation? Answer: 1) 2) c) For the two steps you suggested, that would be the benefits/costs of each? Answer: 1) 2) d) What risk is the banker facing if nothing is done