Write down the balance sheets and calculate the ratios

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Suppose that bank ABC has the following items on its sheet: reserves for 20M euros, loans for 90M euros, securities for 10M euros, deposits for 100M euros, and capital for 20M euros. If 15M of its loans become bad loans and must be written off, will the bank be able to meet the minimum regulatory capital adequacy ratio of 8%? Write down the balance sheets and calculate the ratios.

Reference no: EM132774591

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