How much did the bank have in deposits here?

Question

Ok, if banks had deposits of 500 million and a required reserve ratio of 4%, and also had 15 billion in currency, how much did the Federal Reserve bank have in deposits?

Answer 1

There is probably no precise answer without looking at the books.

First, you have to ask if they are a member bank of the Federal Reserve system. Only about 37% of the nations banks are members.

- If they are a member bank of the Federal Reserve system, they are required to purchase shares that amounts to 3% of their capital. We'll use the $15B to reflect their capital (That's a LOT of idle currency for a bank with only $500M on deposits). If they are not a member bank, no purchase is necessary.

- As far as the reserve requirement: They can maintain that as cash in vault, or at the Fed. Or any combination of both.

- In any case, they would want to maintain a balance at the Fed for efficient check-clearing operations.

So a reasonable guess would be:

- Capital stock range: $0 - $450M
- Reserve (at Fed and/or in vault): $0 - $20M
- Check clearing operations (1-3%): $5M-$15M

Reasonable guess: $5M - $550M

Answer 2

Are you in any way alluding to the bankruptcy of Lincoln Savings and Loan , in texas, i believe, following upon the fraud perpetrated by the bush crime family and john mccain back in 1989, when only charles keating got any jail time for the felonies involved? :))

Answer 3

$15MM+$12.5MM=$27.5MM