Chapter 7: Commercial Bank Flashcards
1
Q
A balance sheet:
A
- A financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time.
- Tell what the bank OWN and OWE
- Assets = Liabilities + Shareholder’s Equity
2
Q
5 Assets of a balance sheet:
A
- Reserves
- Deposits at other banks
- Securities
- Loans
- Other assets
3
Q
- Reserves requirement (RR): _________________
- RR affect ___ – money supply in the market
- ____________ (ER): Actual reserve – Required Reserve
A
- Federal regulation that requires bank to hold a minimum reserve-deposit ratio
- M1
- Excess Reserve
4
Q
_______________________: usually deposits from small banks at larger banks
A
Deposits at other banks
5
Q
Securities:
- ___________
- ________
- ________________
A
- U.S Gov/Agency debt
- municipal debt
- other securities
6
Q
Loans: a _______________ assets - bussiness loans, auto loans, and mortgages
- _________
- _______________
A
- bank’s income-earning
- not very liquid
- about 53% of assets
7
Q
Liabilities of the Bank balance sheet:
A
- Checkable deposits
- Nontransaction deposits
- Borrowings
8
Q
Checkable Deposits: accounts that allow the _______ to write checks to _______.
A
- owner
- third parties
9
Q
Nontransaction deposits: ____________ of bank liabilities (69%) and are accounts from which ________________________.
A
primary source; the depositor cannot write checks
10
Q
Borrowings:
A
- funds from the Fed System, other banks, and coporations
11
Q
Bank capital of a balance sheet: ________
A
- is the source of funds supplied by the bank owners
