Bank capital is the difference between a bank's assets and its liabilities. In other words, it is a bank's net worth. When a bank's net worth becomes negative, the bank can borrow the difference from the central bank. Hence the central bank's role of lender-of-last-resort. Bank capital is the difference between a bank's assets and its liabilities. In other words, it is a bank's net worth. When a bank's net worth becomes negative, the bank can borrow the difference from the central bank. Hence the central bank's role of lender-of-last-resort.
a. True
b. False