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Fractional Reserve Banking and Excess Reserves


Consider the following balance sheet for the commercial bank named Valerian:

Valerian Bank
Balance Sheet as of December 31, 2016
Assets Liabilities and Net Worth
Cash Reserves 25,500 Demand Deposits 103,500
Loans 80,400 Equity 2,400
Other Assets 56,000
105,900 105,900

Suppose that the legal reserve requirement is 6%.

The bank would then be

by the amount