Chapter 11

Problem 01

Input Area:
Deposit withdrawals $100
Deposit inflows $95
Scheduled loan repayments $90
Acceptable loan requests $60
Borrowings from the money market $80
Sales of bank assets $40
Stockholder dividend payments $150
Revenues from sale of nondeposit services $95
Repayment of bank borrowings $60
Operating expenses $50

Output Area:
Projected net liquidity position ($20)
Chapter 11
Problem 02

Input Area:
Net liquidity surplus -$10
Loan demand $32
Repayments of previous borrowings $15
Stockholder dividend payments $10
Deposit inflows $26
Nondeposit service sales $18
Scheduled repayments of customer loans $23
Asset sales $10
Money market borrowings $15
Other operating expenses $15

Output Area:
Deposit withdrawals $30
Chapter 11
Problem 03

Input Area:
Deposits Loans
Time and
Checkable Savings Commercial Consumer
Month Deposits Deposits Loans Loans
January 120 550 650 160
February 115 500 650 230
March 100 500 700 210
April 90 485 700 175
May 105 465 710 160
June 80 490 700 200
July 90 525 700 175
August 100 515 675 150

Output Area:
Deposits Loans
Change from Change from
Previous Previous
Month Total Month Total Month
January 670 na 810 na
February 615 -55 880 70
March 600 -15 910 30
April 575 -25 875 -35
May 570 -5 870 -5
June 570 0 900 30
July 615 45 875 -25
August 615 0 825 -50

Month Source Use Net

January na na na
February 0 -125 -125
March 0 -45 -45
April 35 -25 10
May 5 -5 0
June 0 -30 -30
July 70 0 70
August 50 0 50
Chapter 11
Problem 04

Input Area:
Hot money Vulnerable Stable (core)
funds funds funds
Checkable deposits $10 $65 $85
Savings deposits $5 $152 $450
Nonpersonal time deposits $1,200 $740 $172
Percentage reserves 85.00% 25.00% 5.00%

Reserve requirements on checkable deposits 3.00%

Reserve requirements on savings deposits 0.00%

Low estimate
(current) High estimate
Total Loans outstanding $2,500.00 $2,550.00

Loan growth rate 6.00%

Output Area:
Deposit
liquidity
required
Net Hot Money Funds $1,032.50
Net Vulnerable Funds $238.76
Net Core funds $35.22
Total Deposit Liquidity Requirement $1,306.48

Low estimate
(current) High estimate
Total Loans outstanding:
Estimated Loans 2,650.00 2,703.00
Estimated Additional Loan demand 150.00 203.00
Total Liquidity Requirement $1,456.48 $1,509.48
Chapter 11
Problem 05

Input Area:
Most recent year Previous year
Assets:
Cash and due from depository institutions 345,000 358,000
U.S. Treasury securities 176,000 178,000
Other securities 339,000 343,000
Pledged securities 287,000 223,000
Federal funds sold and reverse repurchase agreements 175,000 131,000
Loans and leases net 2,148,000 1,948,000
Total assets 3,500,000 3,250,000
Liabilities:
Demand deposits 600,000 556,000
Savings deposits 730,000 721,000
Time deposits 1,100,000 853,000
Total Deposits 2,430,000 2,130,000
Core deposits 850,000 644,000
Brokered deposits 58,000 37,000
Federal funds purchased and repurchase agreements 217,000 237,000
Other money market borrowings 25,000 16,000

Output Area:

Cash position indicator 9.86% 11.02%

Liquid securities indicator 5.03% 5.48%
Net federal funds and repurchase agreement position -1.20% -3.26%
Capacity ratio 61.37% 59.94%
pledged securities ratio 55.73% 42.80%
Hot money ratio (not enough information)
Deposit brokerage index 2.39% 1.74%
Core deposit ratio 24.29% 19.82%
Deposit composition ratio 54.55% 65.18%
3,470,000 3,181,000

0.700288 0.669601
2,430,000 2,130,000
Chapter 11
Problem 08

Input Area:
Col A Col B
Associated Liquidity Deficits or
Scenario Probabilities Surpluses(millions)
1 15.00% ($375)
2 35.00% ($200)
3 35.00% $100
4 15.00% $250

Output Area:
Col A * Col B
Scenario Expected Outcome
1 ($56.25)
2 ($70.00)
3 $35.00
4 $37.50
Expected liquidity
requirement ($53.75)
Chapter 11
Problem 09

Input Area:
(Dollar amounts in millions)
Transaction Deposits $75.00
Nonpersonal time deposits $37.00
Vault cash $5.00

Reserve requirements on transaction deposits 3.00%

Reserve requirements on non personal time deposits 3.00%
Reserve requirements above switching amount 10.00%
Reserve tranche $58.80
Exemption amount $10.70

Output Area:

Required daily average reserve balance ($0.83)

Chapter 11
Problem 12

Input Area:

Net transaction deposits 90,000,000

Nonpersonal time deposits under 18 months to maturity 169,000,000
Eurocurrency liabilities 7,000,000
Daily average balance in vault cash 2,000,000

Reserve Requirements:
Net transaction accounts:
Exemption amount to reserve tranche 3.00%
More than reserve tranche 10.00%
reserve tranche 58,800,000
exemption amount 10,700,000
Nonpersonal time deposits:
Less than 18 months 3.00%
18 months or more 0.00%
Eurocurrency liabilities-all types 3.00%

Output Area:

Total Required Legal Reserves 9,843,000

Daily Average Reserve holdings at FRB 7,843,000
Chapter 11
Problem 14

Input Area:
Federal Funds Rate 1.75%
Minimum clearing balance at FRB 30,000,000
Average clearing balance at FRB 33,000,000

Output Area:

Federal Reserve Credit 22,458