The following balance sheet shows the combined assets and lia- bilities of Australia's four major banks at March 2017. (Figures don't quite add-up due to rounding errors.) Numbers in brackets (.) are a component of the above total figure. Assets and Liabilities of Australia's Four Major Banks (end- March 2017) $ billion Assets Currency & Liquid Assets 290 $ billion 2,114 (1,102) Liabilities Deposits - At-Call Borrowing - Short-term - Long-term Securities 427 214 524 186 INTRODUCTIDN TO MACROECONOMICS FIRST EDITION Loans and Advances - Housing Other Total Assets 2,442 (1,551) 313 3,472 Other Total Liabilities Shareholder Equity 390 3,244 228 (a) Calculate the leverage ratio for the major banks. (b) What is the role played by shareholder equity (or bank capital) if a large fall in house prices reduces the value the banks' housing assets by $50 billion? (c) Assume that ncy & Liquid Assets are effectively bank reserves. What is the reserve to deposit ratio of the major banks? (d) Suppose the four major banks were subject to a bank run. How would this affect the above balance sheet? (e) What mechanisms are in place that act to reduce the probably of a bank run occurring in Australia? The following balance sheet shows the combined assets and lia- bilities of Australia's four major banks at March 2017. (Figures don't quite add-up due to rounding errors.) Numbers in brackets (.) are a component of the above total figure. Assets and Liabilities of Australia's Four Major Banks (end- March 2017) $ billion Assets Currency & Liquid Assets 290 $ billion 2,114 (1,102) Liabilities Deposits - At-Call Borrowing - Short-term - Long-term Securities 427 214 524 186 INTRODUCTIDN TO MACROECONOMICS FIRST EDITION Loans and Advances - Housing Other Total Assets 2,442 (1,551) 313 3,472 Other Total Liabilities Shareholder Equity 390 3,244 228 (a) Calculate the leverage ratio for the major banks. (b) What is the role played by shareholder equity (or bank capital) if a large fall in house prices reduces the value the banks' housing assets by $50 billion? (c) Assume that ncy & Liquid Assets are effectively bank reserves. What is the reserve to deposit ratio of the major banks? (d) Suppose the four major banks were subject to a bank run. How would this affect the above balance sheet? (e) What mechanisms are in place that act to reduce the probably of a bank run occurring in Australia