Question: First National Bank reports the following items on its balance
First National Bank reports the following items on its balance sheet: cash, $200 million; U.S. government securities, $150 million; residential real estate loans, $300 million; and corporate loans, $350 million. Its off-balance-sheet items include standby credit letters, $20 million, and long-term credit commitments to corporations, $160 million. What are First National's total risk-weighted assets? If the bank reports Tier 1 capital of $30 million and Tier 2 capital of $20 million, does it have a capital deficiency?
Answer to relevant QuestionsHow is the Basel Agreement likely to affect a bank's choices among assets it would like to acquire?Suppose that a bank has a return on equity capital of 12 percent and that its retention ratio is 35 percent. How fast can this bank's assets grow without reducing its current ratio of capital to assets? Suppose that the ...Under the terms of the Original Basel Agreement, what risk weights apply to the following on-balance-sheet and off-balance-sheet items? Residential real estate loans ...... Credit card loans Cash................ ...What are the principal types of loans made by banks?Explain the following terms: character, capacity, cash, collateral, conditions, and control.
Post your question