Prepare the bank's balance sheet and income statement, and calculate the bank's reserves using the following information (figures in mln €): Average paid interest rate 6% Average earned interest rate 9% Staff cost 20 Loan from Central Bank ? Demand deposits Time deposits 100 600 Loans to clients 1000 Operative expenses 14 Incomes on commissions and services 40 Cash and reserves 300 200 Net foreign exchange gains 22 Required reserve rate for time deposits 10% Required reserve rate for demand deposits 20% Investments in securities Equity Fixed assets 800 400

Prepare the bank's balance sheet and income statement, and calculate the bank's reserves using the following information (figures in mln €): Average paid interest rate 6% Average earned interest rate 9% Staff cost 20 Loan from Central Bank ? Demand deposits Time deposits 100 600 Loans to clients 1000 Operative expenses 14 Incomes on commissions and services 40 Cash and reserves 300 200 Net foreign exchange gains 22 Required reserve rate for time deposits 10% Required reserve rate for demand deposits 20% Investments in securities Equity Fixed assets 800 400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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 $10Traiding portfolio $15Loans $50Investment portfolio $25Liabilities and Equitites:Deposits $68Interbank loans $20Equity $12
Consider a bank with the following balance sheet Assets Liabilities Required reserves Excess reserves T-bills Commercial loans $ 9 million Checkable deposits $ million Bank capital $ 44 million $ 52 million $ 100 million $ 10 million The bank makes a loan commitment for $15 million to a commercial customer. Before the commitment, the bank's capital ratio equals%. (Round your response to two decimal places.)
Imagine that the banking system's balance sheet can be represented by the following t-account: Assets LIABILITIES AND NET WORTH RESERVES 200 DEPOSITS 2000 BONDS 800 LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS LIABILITIES AND NET WORTH RESERVES __?___ DEPOSITS ___?__ BONDS ____?___ LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___
Consider the following bank balance sheet and the associated yields for earning assets and costs of liabilities. Assets Amount (000). Rate cash 400. 0% securitie 1600. 6.5% commercial loans 4000 9.0% credit card loans 3300. 10.0% loss reserves. 200 other assets 500 total assets. 10,000 Liabilities and equity Demand deposits. 1600 MMDAs. 3600 6.0% CDs. 2600 6.5% ST deposits. 1360. 5.0% Deferret tax credit. 200 Equity 640 total. 10000 Assume that net charge-offs $44,000 cash taxes paid $78,000 and allocated risk capital is $550,000 with a capital charge of 6 percent. determine : a) Calculate and show the bank income statement.
Examine the Falance sheet for a bank below: Assets Liabilities Reserves 600 000 Demand Deposits 5 230 000 Loans 2 000 000 Capital 1 250 000 Buildings 3 880 000 If the desired reserve ratio changes to 5 percent and the bank were to loan out those excess reserves, what is the otential expa nsion in demand deposits (increase in MS) in the banking system? ***You just need to put the number in your answer, no units or commas*** Answer:
Assets- reserves: 75000 loans : 430000 liabilities : deposites : 500000 net worth : 5000 a) Suppose that a bank has the following balance sheet and you deposit $5000 in currency into your cheque account at such bank. Use a T-account to show the initial impact of this transaction on the bank’s balance sheet. What is the impact of this transaction on M1? (b) If the bank holds a reserve ratio of 0.1, what is the maximum amount the bank can loan out. Suppose that the bank intends to loan out the maximum amount it can. Show the impact of the loan on the balance sheet.
Balance sheet for a commercial bank FAB T-account Assets Liabilities Reserves $ ? Deposits $900 Loans $910 Debt $50 Capital (owner's equity) $50 The UAE central bank fixed the reserve ratio, R= 10% a- Calculate the reserve amount b- Define leverage and calculate the leverage ratio of the bank and interpret it
The T-account below represents assets and liabilities for a bank. Use the T-account to calculate the bank's loans Loans Bonds Reserves Provide your answer below: million Assets ? $18 million $5 million Liabilities + Net Worth Deposits Net Worth $12 million $13 million
a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $70 The bank is expecting a $12 million net deposit drain. Liabilities and equity Deposits Equity Total liabilities and equity $5 10 55 $62 9 $70 ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.
The Money Multiplier Process Loan Loan Loan Initial etc. deposit ($100) University Bank Deposit Bank #2 Deposit Bank #3 Bank Deposit #4 Excess reserves: $25 Required reserves: $75 Excess reserves: $6.25 Required reserves: $18.75 Excess reserves: $1.56 Required reserves: $4.69 Excess reserves: $0.39 Required reserves: $1.17 a. What volume of loans can the banking system in the figure support? b. If the reserve requirement were 80 percent rather than 75 percent, what would the system's lending capacity be?
Show the Bank’s balance sheet if the Bank purchases liabilities to offset a net deposit drain of $10 million (required reserves ratio 7%):
a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $5 10 55 $70 Liabilities and equity Deposits Equity Total liabilities and equity The bank is expecting a $12 million net deposit drain. $62 8 $70 i) Show the new balance sheet if the bank uses purchased liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.