Question 29 Discussion/Calculation Question [18 points] . ....- Not yet answered "Sydney Bank" has the following balance sheet (in millions), with Basel Ill risk Marked out of 18.00 weights indicated in parentheses: Flag question Assets Liabilities Cash (0%) $26 Deposits $170 Liquid assets $24 Subordinated debt $10 (20%) (5 years) (Tier 2) Mortgage loans $75 Preferred stock $10 (50%) (Additional Tier 1) Consumer loans $75 Equity (CET1) $10 (100%) Total assets $200 Total liabilities $200 Notes: Equity is Common Equity Tier 1 (CET1) capital; cumulative preferred stock is additional Tier 1 capital; subordinated debt (5-year) is Tier 2 capital. a) List four reasons why regulators are concerned with the levels of capital held by financial institutions. [4 points] b) Identify three types of risks that Sydney Bank faces based on the given balance sheet, and provide a brief explanation for each. [3 points] c) What are the risk-weighted on-balance-sheet assets of the bank as defined by the Basel Accord? Please show your work. [2 points]Total assets $200 Total liabilities Notes: Equity is Common Equity Tier 1 (CET1) capital; cumulative preferred stock is additional Tier 1 capital; subordinated debt (5-year) is Tier 2 capital. a) List four reasons why regulators are concerned with the levels of capital held by financial institutions. [4 points] b) Identify three types of risks that Sydney Bank faces based on the given balance sheet, and provide a brief explanation for each. [3 points] c) What are the risk-weighted on-balance-sheet assets of the bank as defined by the Basel Accord? Please show your work. [2 points] d) Disregarding the capital conservation buffer, what are the required amounts of CET1, Tier 1; and total capital for Sydney Bank's on-balance-sheet assets under Basel Ill? Does the bank have sufficient capital to meet the Basel requirements? Please describe or show your work. [6 points] e) Including the capital conservation buffer requirement, what are the required amounts of CET1, Tier 1, and total capital for Sydney Bank's on-balance-sheet assets under Basel Ill? Does the bank have sufficient capital to meet the Basel requirements? Please describe or show your work. [3 points] Note: For all calculations, the solution process must be clearly shown (general formula, formula with values, final result). BI