Financial Institutions Management: A Risk Management Approach 10th Edition by Anthony Saunders Solu

 
b.     Redo part (a) using a 12 percent reserve requirement.
 
  Panel A: Initial Balance Sheets
                                              Federal Reserve Bank                                                                                   
               Assets                                         Liabilities                                
Securities               $60m                     Reserve accounts          $60m
---------------------------------------------------------------------------------------------
                                                     Bank Three                                                                                          
              Assets                                          Liabilities                                 
Loans                   $540m                     Transaction deposits    $600m
Reserve deposits      60m                               
at Fed                                                                                                                                                                                    
 
Panel B: Balance Sheet after All Changes Resulting from Decrease in Reserve Requirement