# What is the effect on money multiplier of the following three cases?

Assuming ceterus paribas in each case:

(i)The bank expands its operations in the field of financial derivatives.

(ii) Increasing competition leads to a fall in the transaction costs incurred by banks in adjusting their balance sheets.

(iii) The non-bank public fears a banking crisis and a bank 'panic' occurs

I know that Money Multiplier formula is as follows: $$m$$ = $$(1+c)$$/$$(r+e+c)$$, so that's just a question of how each case impacts $$c$$ - cash - to - deposit ratio and $$e$$ - excess reserve ratio.

in case (iii) I believe as there is an uncertainty in the economy people will be less willing to take loans and deposit into banks, so $$c$$ should increase and probably $$e$$ should decrease.

(ii) fall in transaction costs should create more money for banks to give out as loans, so that creates more deposits and more reserves. thus $$c$$ will fall and $$e$$ will increase

Regarding (i) I have no idea how to proceed. As far as I got financial derivatives are the contracts which enable more credit in the sector and thus there is an increase in loans, deposits, and reserves but I am not sure if its right way of thinking.