TD Bank starts with $200 in bank capital. It then accepts $800
in deposits. It keeps...
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Economics
TD Bank starts with $200 in bank capital. It then accepts $800in deposits. It keeps 12.5% of deposits in reserves. It uses therest of its assets to make bank loans.
Show the balance sheet of TD Bank. You may type directlyinto the following T account.
TD Bank
Assets
Liabilities
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What is TD Bank’s leverage ratio.
Suppose that 20 percent of the borrowers from TD Bank defaultand these bank loans become worthless. Show the bank’s new balancesheet.
By what percentage do the bank’s total assets decline? By whatpercentage does the bank’s capital decline? Which change is largerand why?
Answer & Explanation
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4.2 Ratings (515 Votes)
a Pls see table below The bank loans out 875 of deposits ie 700 plus the initial cash it had brought in as capital Assets Amount Liabilities Amount
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