Question: Disregarding the capital conservation buffer, does the bank have sufficient capital to meet the Basel requirements? How much in excess? How much short? A bank

 Disregarding the capital conservation buffer, does the bank have sufficient capital

Disregarding the capital conservation buffer, does the bank have sufficient capital to meet the Basel requirements? How much in excess? How much short?

A bank has the following balance sheet in $M Assets Cash Treasury securities Residential mortgages, category 1, 70% LTV Consumer Loans Loan Loss Reserves Total Assets $M Liabilities & Equity 200 Retail Deposits 150 Subordinated Debt 500 Common Stock 250 Retained Earnings -125 Noncumulative perpetual preferred stock 975 Total Liabilities & Equity SM 775 75 65 40 20 975 Off-Balance Sheet $35M Commercial direct-credit substitute standby letters of credit to a public corporation $65M 5-year FX forward contracts -out-of-the-money by $3M

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