Why might the managers of a bank want the bank to be highly leveraged?

FINANCES: LIABILITIES/LEVERAGED

“We can think of a bank’s liabilities as the sources of its funds, and we can think of a bank’s assets as the uses of its funds.”

1. Explain what this statement means.

2. Why might the managers of a bank want the bank to be highly leveraged?

3. Why might the bank’s shareholders want the bank to be less highly leveraged?

Add citation and references (minimum 450 words)

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