3. The Basel Accord requires that the banks need to hold capital at a level equal to 8% of the risk-adjusted assets on the balance sheet. The assets and their risk weights are: Asset 1998 Basel Accord Risk Weights Asset Risk Weight Bonds issued by OGDC countries 0.00% Claims on industrial country banks 20.00% Residential Mortgages 50.00% Consumer and corporate Loans 100.00% Risk weight on cash and Reserves in 0% Consider a Bank with the following Balance sheet. Find the amount of the bank capital the Basel weights require. Then assuming that borrowing is zero, find the level of deposits and the leverage ratio of the bank. Liabilities 0 Assets Reserves 1,000 Deposits Securities Government Bonds, Canada 1,000 Borrowing Loans Industrial Country Banks 1,000 Mortgages 3,000 Consumer 5,000 Capital