Recently, some economists have suggested that the Central Bank of the Republic of Turkey should increase...

 

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Recently, some economists have suggested that the Central Bank of the Republic of Turkey should increase the interest rate. In an economic environment with these suggestions, by considering a public owned commercial bank's simplified balance sheet, answer each of the following separately: A ..BANK (30/04/2023-million TL) Deposits Demand 500 Time 2500 500 Reserves Required 400 Excess 100 Loans Securities GDDI 4550 Other 450 Fixed Assets 2000 Other Assets 1000 TOTAL 9000 1000 5000 Borrowings Interbank Discount Internationa2500 Capital 2000 500 TOTAL L 3000 5000 1000 9000 a. Constituting 95 percent of the stock of securities held by the bank, the average maturity of the Government Domestic Debt Instruments (GDDI) is 2 years and the average interest rate is 15 percent. If the Central Bank Monetary Policy Committee increases the policy rate at the next meeting and the market interest rate rises to 50 percent accordingly, what will be the net value of this bank? b. List the urgent measure or measures that this bank should take. Recently, some economists have suggested that the Central Bank of the Republic of Turkey should increase the interest rate. In an economic environment with these suggestions, by considering a public owned commercial bank's simplified balance sheet, answer each of the following separately: A ..BANK (30/04/2023-million TL) Deposits Demand 500 Time 2500 500 Reserves Required 400 Excess 100 Loans Securities GDDI 4550 Other 450 Fixed Assets 2000 Other Assets 1000 TOTAL 9000 1000 5000 Borrowings Interbank Discount Internationa2500 Capital 2000 500 TOTAL L 3000 5000 1000 9000 a. Constituting 95 percent of the stock of securities held by the bank, the average maturity of the Government Domestic Debt Instruments (GDDI) is 2 years and the average interest rate is 15 percent. If the Central Bank Monetary Policy Committee increases the policy rate at the next meeting and the market interest rate rises to 50 percent accordingly, what will be the net value of this bank? b. List the urgent measure or measures that this bank should take.

Answer rating: 100% (QA)

A Determine the net value of the bank Total stock of securities TL 5000 million 95 of securities 095 TL 5000 million TL 4750 million Change in value of securities Market interest rate Average interest ... View the full answer