The financial crisis compelled banks to reduce their leverage sharply. Consider the following two views of the balance sheet of a bank before and after the financial crisis.

Calculate the leverage ratios for each view.

Instructions: Enter your responses rounded to two decimal places.

View 1: Leverage ratio =

View 2: Leverage ratio =

Bank Balance Sheet: View (in millions) Bank Balance Sheet: view 2 (in millions Assets Liabilities Assets Liabilities Deposits $800 Other borrowed funds $90 Bank capital $110 Deposits $200 Reserves $30 Loans $820 Securities $150 Reserves $30 Loans $820 Securities $150 Other borrowed funds $600 Bank capital $90 Bank Balance Sheet: View (in millions) Bank Balance Sheet: view 2 (in millions Assets Liabilities Assets Liabilities Deposits $800 Other borrowed funds $90 Bank capital $110 Deposits $200 Reserves $30 Loans $820 Securities $150 Reserves $30 Loans $820 Securities $150 Other borrowed funds $600 Bank capital $90