In September 2017, Regions Bank had its desired reserve ratio when it held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2017 and September 2018, deposits decreased from $114 million to $95 million. If Regions Bank wants to maintain its desired reserve ratio in 2018, it will

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To maintain its desired reserve ratio, Regions Bank needs to adjust its reserves in proportion to its deposits. Since deposits decreased from $114 million to $95 million, the bank would need to decrease its reserves to maintain the same reserve ratio, not increase them or change its lending practices based on the information provided.

In September 2017, Regions Bank Had Its Desired Reserve Ratio