QUESTION 20 Consider a bank with the following balance sheet: Assets Required reserves $17 million Checkable...
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QUESTION 20 Consider a bank with the following balance sheet: Assets Required reserves $17 million Checkable deposits $185 million Excess reserves $33 million Bank capital $30 million Municipal Bonds $25 million Residential Mortgages $120 million. Commercial loans $20 million Calculate the bank's risk-weighted assets (RWA) and determine whether it satisfies the risk weighted capital requirements set by Basel I. Hint: Use the following table. Category Weight Example 1 0 Reserves and treasures 0.2 Claims on banks in OECD countries 0.5 Municipal bonds and residential mortgages 4 1 Loans to consumers and corporations ORWA $120 million. The bank is complying with the capital requirements set by Basel 1. O RWA $140.5 million. The bank is complying with the capital requirements set by Basel 1. O RWA $185.5 million. The bank is complying with the capital requirements set by Basel 1. ORWA-$98.5 million. The bank is not complying with the capital requirements set by Basel I. O None of the above. 2 3 Liabilities QUESTION 20 Consider a bank with the following balance sheet: Assets Required reserves $17 million Checkable deposits $185 million Excess reserves $33 million Bank capital $30 million Municipal Bonds $25 million Residential Mortgages $120 million. Commercial loans $20 million Calculate the bank's risk-weighted assets (RWA) and determine whether it satisfies the risk weighted capital requirements set by Basel I. Hint: Use the following table. Category Weight Example 1 0 Reserves and treasures 0.2 Claims on banks in OECD countries 0.5 Municipal bonds and residential mortgages 4 1 Loans to consumers and corporations ORWA $120 million. The bank is complying with the capital requirements set by Basel 1. O RWA $140.5 million. The bank is complying with the capital requirements set by Basel 1. O RWA $185.5 million. The bank is complying with the capital requirements set by Basel 1. ORWA-$98.5 million. The bank is not complying with the capital requirements set by Basel I. O None of the above. 2 3 Liabilities
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Related Book For
Money Banking and Financial Markets
ISBN: 978-1259746741
5th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
Posted Date:
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