Show the Bank’s balance sheet if the Bank purchases liabilities to offset a net deposit drain of $10 million (required reserves ratio 7%): Assets : Cash $10 Traiding portfolio $15 Loans $50 Investment portfolio $25 Liabilities and Equitites: Deposits $68 Interbank loans $20 Equity $12

Show the Bank’s balance sheet if the Bank purchases liabilities to offset a net deposit drain of $10 million (required reserves ratio 7%): Assets : Cash $10 Traiding portfolio $15 Loans $50 Investment portfolio $25 Liabilities and Equitites: Deposits $68 Interbank loans $20 Equity $12

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Show the Bank’s balance sheet if the Bank purchases liabilities to offset a net deposit drain of $10 million (required reserves ratio 7%):

Assets :
Cash $10
Traiding portfolio $15
Loans $50
Investment portfolio $25
Liabilities and Equitites:
Deposits $68
Interbank loans $20
Equity $12

Assets
Liabilities and Equities
Cash
$10 Deposits
$68
Trading portfolio
15
Interbank loans
20
50 Equity
12
Loans
Investment portfolio 25
$100
Total
Total
$100

Definition Definition Minimum amount that a commercial bank must hold in liquid assets in order to fulfill central bank regulations.

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