1. Consider the two banks below. Compute the RoE for both banks and explain what they show. If the banks face 25% of the loans due to default, might this be a sign that the bank is taking on more risk? Why the regulators in the Central Bank prefer the high capital? Explain your answer. Bank of Sylhet = Asset Liability Reserve (Required Reserve+ Deposit = 50 mil. Excess Reserve) = 5 mil. + 5 mil. Loan = 20 mil. Bank capital = 10 mil. Securities = 20 mil. Other Asset = 10 mil. = = Bank of Dhaka Asset Liability Reserve (Required Reserve+ Deposit = 55 mil. Excess Reserve) = 5 mil. + 5 mil. Loan = 20 mil. Securities = 20 mil. Bank capital = 5 mil. Other Asset = 10 mil