Question

A bank has the following balance sheet
Cash 
3 
Retail Deposits (stable) 
25 
Treasury Bonds (>1 year) 
5 
Retail Deposits (less stable) 
15 
Corporate Bonds Rated A 
4 
Wholesale Deposits 
44 
Residential Mortgages 
18 
Preferred Stock (> 1 yr) 
4 
Small Business Loans (<1 yr) 
60 
Tier 2 Capital 
3 
Fixed Assets 
10 
Tier 1 Capital 
9 
100 
100 
(a) What is the Net Stable Funding Ratio?
(b) The bank decides to satisfy Basel III by raising more retail deposits and
Keeping the proceeds in Treasury bonds. What extra retail deposits need
to be raised?


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  • CreatedJuly 30, 2015
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