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4.1 As a group of Central Bank analysts during a lunch break at a management committee meeting, a newly appointed trainee analyst joins your discussion
4.1 As a group of Central Bank analysts during a lunch break at a management committee meeting, a newly appointed trainee analyst joins your discussion and voices the frustration of understanding capital adequacy requirements. You are requested by the senior manager to explain the concept to the analyst, using the following headings: a. Basel Accord on capital adequacy (8) b. Purpose of capital adequacy ratios (7) 4.2 Usuthu Development Bank has R155m in assets composed of R55m in government loans, R35m in mortgage loans, R45m in corporate loans, and R20m in investments. The corresponding risk weights defined by the entity are 0% for government, 45% for mortgage loans, 100% for corporate, and 25% for investments. Based on these assets, what would be the bank's capital adequacy requirements
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