XYZ Bank has the following balance sheet (in $million):

Loans 100

Securities 25

Inter-bank Lending 0

Cash/Reserves 10

- -

Demand Deposits 110

Bonds 20

Equity ?

. Heres ABC Banks balance sheet (in $million):

Loans 2000

Securities 250

Cash/reserves 12

- -

Demand Deposits 1000

Bonds 200

Inter-bank Borrowing 1040

Equity ?

Return to the original balance sheets for ABC and XYZ. Suppose reserve requirements are 3% against deposits. What are total, required and excess reserves for XYZ and ABC?

XYZ lends $5 million to ABC in the federal funds market. Show their new balance sheets. What are the new total, required and excess reserves for XYZ and ABC? What are their new leverage ratios compared to question 2.

Show the new balance sheets for ABC and XYZ, as well XYZs and ABCs new reserves positions on the Federal Reserves balance shee