The bank you own has the following balance sheet: If the bank suffers a deposit outflow of
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If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions must you take to keep your bank fromfailing?
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Assets Liabilities Reserves 75 million Deposits $500 million Loans $525 million Bank capital $100 million
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The 50 million deposit outflow means that reserves fall by 50 million to 25 million Since require...View the full answer
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Related Book For
Economics of Money, Banking and Financial Markets
ISBN: 978-0321598905
9th Edition
Authors: Frederic S. Mishkin
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