11. Shinhan Bank has 100 in checkable deposits, total reserves of 15, a loan of 85, and no bank capital. Required ratio is given by 10%. Suppose that Shinhan Bank suffers a 10 deposit outflow and

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11. Shinhan Bank has 100 in checkable deposits,
total reserves of 15, a loan of 85, and no bank
capital. Required ratio is given by 10%. Suppose
that Shinhan Bank suffers a 10 deposit outflow and
can't retrieve its loan back. If Shinhan bank
chooses to borrow from the Bank of Korea to meet
its reserve requirement, how much does Shinhan
bank needs to borrow?
Transcribed Image Text:11. Shinhan Bank has 100 in checkable deposits, total reserves of 15, a loan of 85, and no bank capital. Required ratio is given by 10%. Suppose that Shinhan Bank suffers a 10 deposit outflow and can't retrieve its loan back. If Shinhan bank chooses to borrow from the Bank of Korea to meet its reserve requirement, how much does Shinhan bank needs to borrow?
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