What circumstances might persuade them

Reference no: EM131353897

1. Excess reserves make a bank less vulnerable to runs. Why, then, don't bankers like to hold excess reserves? What circumstances might persuade them that it would be advisable to hold excess reserves?

2. If the government takes over a failed bank with liabilities (mostly deposits) of $2 billion, pays off the depositors, and sells the assets for $1.5 billion, where does the missing $500 million come from? Why?

Reference no: EM131353897

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