Posted: September 17th, 2017

Bank operations using T accounts

Bank operations using T accounts

This assignment utilizes the material regarding commercial banking balance sheets. First, use a T-account to show how a $100 deposit affects the balance sheet. Separate the funds into required reserves and excess reserves using a required reserve ratio of 0.1. Second, demonstrate what happens to the balance sheet when the bank loans out all of the excess reserves. Third, demonstrate what happens to the balance sheet after loaned funds are deposited in a different bank.

Hubbard, R. (2013). Money, Banking, and the Financial System (2nd ed.). New York, N.Y.: Pearson. ISBN: 9780132994910
Can also use First Edition
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