A bank has $1 million in total deposits and a required reserve ratio of 10%. After a large withdrawal of $200,000, how should the bank adjust its T-accounts to maintain compliance with reserve requirements?

When a bank has a required reserve ratio of 10%, it must keep 10% of its total deposits as reserves. In this case, with $1 million in deposits, the bank needs to maintain $100,000 in reserves. After a withdrawal of $200,000, the total deposits drop to $800,000, meaning the bank now needs to hold $80,000 in reserves. Since the bank initially had $100,000 in reserves, it has $20,000 more than required, which means it can adjust its T-accounts by reducing its reserves or making new loans. For example, if the bank decides to lend out $20,000, it can do so while still meeting the reserve requirement.