A bank has the following balance sheet:

Cash 3 Retail Deposits (stable) 25 Treasury Bonds ( 1 yr) 5 Retail Deposits (less stable) 15 Corporate Bonds Rated A 4 Wholesale Deposits 44 Mortgages 18 Preferred Stock ( 1 yr) 4 Small Business Loans 60 Tier 2 Capital 3 Fixed Assets 10 Tier 1 Capital 9 100 100

(a) What is the Net Stable Funding Ratio?

(b) The bank decides to satisfy Basel III by raising more retail deposits and keeping the proceeds in Treasury bonds. What extra retail deposits need to be raised?

AppendixLO1