Question

If the bank you own has no excess reserves and a sound customer comes in asking for a​ loan, should you automatically turn the customer​ down, explaining that you​ don't have any excess reservesLOADING... to lend​ out? Why or why​ not? What options are available for you to provide the funds your customer​ needs?

Answer 1

No.

Step-by-step explanation:

Based on the information provided within the question it can be said that in this scenario you should Not turn down the customer. Mainly because the funds/reserves needed can be acquired in a variety of ways. Such options include borrowing at the discount window, borrowing at the federal funds market, or even issuing negotiable CD's. Therefore since there are options for providing the funds the customer needs, then the customer should not be rejected.