Problem: Banking requirements
Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following questions.
| Bank's Balance Sheet |
| Assets |
Liabilities and Owners' Equity |
| Reserves |
$200 |
Deposits |
$1,600 |
| Loans |
$800 |
Debt |
$250 |
| Securities |
$1,000 |
Capital (owners' equity) |
$150 |
Suppose a new customer adds $100 to his account at Southwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account.
This would also bring the leverage ratio from its initial value of to a new value of .
Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply.
- The riskiness of each asset
- The total value of liabilities
- The size of the monetary base