You are a bank regulator working for the Federal Reserve. It is your job to see whether banks are solvent or insolvent, liquid or illiquid. four categories: Liquid an solvent (best) Illiquid but solvent (probably needs short-term loans from other banks or from the Fed) Liquid but insolvent (should be shut down immediately: could fool people for a while if not for your good efforts) Illiquid an insolvent (should be shut down immediately)
a. Bank of DelMarVa
Short-term assets Short-term liabilities
$10 million $6 million
Total assets Total liabilities
$40 million $50 million
b. Bank of Escondido
Short-term assets Short-term liabilities
$6 million $10 million
Total assets Total liabilities
$50 million $40 million
c. Bank of Previa
Short-term assets Short-term liabilities
$12 million $10 million
Total assets Total liabilities
$50 million $40 million
d. Bank of Cambia
Short-term assets Short-term liabilities
$8 million $10 million
Total assets Total liabilities
$30 million $40 million
e. Bank of Marshall
Short-term assets Short-term liabilities
$120 million $100 million
Total assets Total liabilities
$500 million $400 million