What happens to the liquidity and solvency ratios of Bigbank, Smallbank and Safebank as a

consequence of these transactions?

The liquidity ratio of Smallbank decreases, as the current account increases more than the liquidity
reserves increase. They have less reserves at the CB to deal with short term outflows and they have
more deposits accounts.

The solvency ratio of Smallbank also decreases, as the equity remains constant and the balance sheet
amount increases.

The liquidity ratio of Bigbank increases, as the reserves remain constant and the current account
decreases. They have more reserves at the CB as a percentage of deposits accounts.

The solvency ration of Bigbank decreases, as equity remains constant, and the total amount of the
balance sheet increases.

The liquidity ratio of safebank increases, as the reserves held at the CB increase and the current
accounts remain constant.

The solvency ratio of Safebank decreases, as the equity remains constant, and the total amount of
the balance sheet increases.