Question: Below you can find a table with the top 3 institutions that contributed the most to systemic risk in the U.S. as of April 2021.

  1. Below you can find a table with the top 3 institutions that contributed the most to systemic risk in the U.S. as of April 2021. Calculate SRISK and LRMES for these 3 banks and provide a quick interpretation of these 3 metrics.

Institution

SRISK ($,M)

LRMES (%)

Beta

MVE

Liabilities

Citigroup

?

?

1.03

151,421

2,066,038

Wells Fargo

?

?

0.91

184,839

1,779,954

Prudential

?

?

1.22

39,043

872,512

Assume d=0.4 (threshold of drop in general market value) and prudential capital requirement k=0.08.

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