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Chapter 9 Bank Management

Chapter Objectives

By the end of this chapter, students should be able to:

  1. Explain what a balance sheet and a T-account are.
  2. Explain what banks do in five words and also at length.
  3. Describe how bankers manage their banks’ balance sheets.
  4. Explain why regulators mandate minimum reserve and capital ratios.
  5. Describe how bankers manage credit risk.
  6. Describe how bankers manage interest rate risk.
  7. Describe off-balance sheet activities and explain their importance.