The bank you own has the following balance sheet:       ASSETS |     LIABILITIES    Reserves 75M | Deposits 500M Loans 525M    | Bank Capital 100M If the bank suffers a deposit outflow of $50M with a required reserve ratio on deposits of 10%, show the resulting effects using T-accounts.   As a result, what actions must you take to keep your bank from failing (show T-accounts)?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter27: Money And Banking
Section: Chapter Questions
Problem 30P: A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It...
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The bank you own has the following balance sheet:

      ASSETS |     LIABILITIES   

Reserves 75M | Deposits 500M

Loans 525M    | Bank Capital 100M

If the bank suffers a deposit outflow of $50M with a required reserve ratio on deposits of 10%, show the resulting effects using T-accounts.  

As a result, what actions must you take to keep your bank from failing (show T-accounts)?

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