Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A bank, which is using the standard approach and of small size, has Risk-Weighted Assets (RWA) of $200,000 and total assets of $300,000. The bank's
A bank, which is using the standard approach and of small size, has Risk-Weighted Assets (RWA) of $200,000 and total assets of $300,000. The bank's regulatory capital is shown in the table below. The country applies a 0.5% countercyclical buffer. Basel Ill capital regulation applies. Common Equity Tier 1 (CET1) $11,000 Additional Tier 1 $2,000 Tier 2 $6,000 The actual Total capital ratio of this bank is Round up your result to 3 decimal place. Do not show the calculations. The required amount of CET1 capital to meet the CET1 minimum requirement is . Do not type the $ sign. This bank meets the minimum capital requirements Type F for fully, P for partially or N for not at all. The additional amount of CET1 (on top of the required CET1 above) required to meet the Tier 1 minimum requirement is Do not type the $ sign. The amount of free CET1 capital after meeting the Basel Ill minimum capital requirements is Do not type the $ sign. This bank meets the conservation buffer Type Y for Yes, N for No, or ? if the question does not provide enough information to conclude. On the basis of the information above, the bank will be asked to Type 1 if the bank needs to restructure its assets. Type 2 if the bank needs to reduce the payment of bonuses to its employees Type 3 if no action is required. Imagine that the Northern Territory government credit rating is downgraded by Moody's to Baa1. Using the table of conversion provided here Basel II III risk weights grade and weight.pdf Indicate the credit rating grade associated with lending to the Northern Territory government: Only type a number. Indicate the risk weight that should be used for that asset when calculating RWA 96. If the weight is 12096 type 120
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started