Creating a bank

Depositing reserves in the Federal Reserve Banks.
- required reserves
- reserve ratio

Formula:

Reserve Ratio =
          Commercial bank's required reserves                                  

 Commercial bank's checkable deposits liabilities

Excess Reserves= Actual Reserves - Required Reserves

Required Reserves= Check-able Deposits * Reserve Ratio


Assets are made up of:
- Reserves: RR %
- Required Reserves (rr) is the percentage required by the FED to keep on hand to meet the demand.
-Excess Reserves (er) is the percentage reserves over and above the amount needed to satisfy the minimum of the reserve ratio that is set by the FED.
- Loans that firm consumers and other banks earning interest.
- Loans that go to the government which are equal to treasury securities.
- Bank property- (if the banks fails, you can liquidate the building/ property.)  
Liabilities + Equities are made of :
-Demand Deposits (dd) is money that is put into the bank.
-Times deposits (Check-able Deposits)
-Loans from Federal Reserve and other banks.
-Shareholders Equity- (to set up a bank, you must invest your own money in it to have a stake in the banks successes or failures.)