Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz

Exercise 8

A proposal for "100 percent banking" involves a reserve ratio of unity. Such a scheme has been proposed for the United States in order to enhance the Fed's control over the money supply.
a. Indicate why such a scheme would help monetary control.
b. Indicate what bank balance sheets would look like under this scheme.
c. Under 100 percent banking, how would banking remain profitable