The Economics of Money and Banking Chapter 6 Commercial Banks 》》 Contraction of Money Creation by Commercial Banks 4 ■ The ratio of required reserve(rd Banks Money ■ The ratio of excess reserve (e Creation by Commercial ■ The ratio of cash leakage(c) ■ K=1/rd ■ K=1/(rd +e+c) 17 GUO YING SEM TONGJI UNIVERSITYThe Economics of Money and Banking 17 GUO YING SEM TONGJI UNIVERSITY 4  The ratio of required reserve ( rd )  The ratio of excess reserve ( e )  The ratio of cash leakage ( c )  K=1/ rd  K=1/(rd +e+c ) Contraction of Money Creation by Commercial Banks Chapter 6 Commercial Banks Banks Money Creation by Commercial