Two competing commercial banks situated in the same community have comparable asset portfolios, but one operates with a total capital ratio of 10 percent, while the other operates with a ratio of 12 percent. Compare the opportunities and risk profiles of the two banks.
Answer to relevant QuestionsExplain why increased regulatory capital requirements lead to a greater consolidation of banking firms via mergers and acquisitions. Discuss whether each of the following types of loans can be easily securitized. Explain why or why not. a. Residential mortgages b. Small business loans c. Pools of credit card loans d. Pools of home equity loans e. ...Describe the basic features of the three functions underlying the credit process at commercial banks. Explain how a company’s permanent working capital needs differ from its seasonal working capital needs. Which of the following loan requests by an off campus pizza parlor would be unacceptable, and why? a. To buy cheese for inventory b. To buy a pizza heating oven c. To buy a car for the owner d. To repay the original long ...
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