Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and decrease the capital account.
This would also bring the leverage ratio from its initial value of _____ to a new value of _____
Which of the following is true of the capital requirements? Check all that apply.
a. Its intended goal is to protect the interests of those who hold equity in the bank.
b. Its intended goal is to protect the interests of the depositors.
c. It specifies a minum leverage ratio for al banks.
