A bank has the following balance sheet for 2020. Also shown are the respective interest rates:

Assets	Amount ($MM)	Rate, %
Business Loans	50	6
Corporate Bonds	26	5
Government Bonds	18	2.5
Cash	7
Real Assets	2

Liabilities	Amount ($MM)	Rate (%)
Demand Deposits	36	0
Time Deposits	45	1.1
Inter-Bank Borrowing	16	1.25
Preferred Equity	1
Common Equity	5

Off-Balance Sheet Item

Of the business loans above, $10MM was drawn from a $35MM Credit Line. That is, assume the average amount of the Line drawn during the year is $10MM. The bank charges 0.25% for unused lines of credit.

I               Assume reserve requirements are 3% for demand deposits, 0% for time deposits. How much excess reserves does the bank have?

II             Suppose capital requirements are:

8% for loans

% for bonds with risk of default

4% for inter-bank lending

2.5% for undrawn credit lines