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A banks balance sheet information is shown below (in millions of dollars): On-Balance-Sheet Assets Face Value Liabilities and equity Face Value Cash $10 Demand deposits

A banks balance sheet information is shown below (in millions of dollars):

On-Balance-Sheet Assets

Face Value

Liabilities and equity

Face Value

Cash

$10

Demand deposits

140

Treasury bills

20

CDs

120

Long-term government securities

55

Commercial papers

40

Federal Reserve stock

40

Fed funds purchased

20

Repos secured by federal agencies

20

Convertible bonds

50

Claims on U.S. depository institutions

60

Subordinated bonds

40

Claims on or guaranteed by federal agencies

30

Perpetual preferred stock (nonqualifying)

10

Munis (general obligation)

25

Municipal revenue bonds

40

Retained earnings

30

Residential mortgages, category 1, loan-to-value ratio 75%

20

Common stock

20

Commercial loans

100

Noncumulative perpetual preferred stock (qualifying)

10

Consumer loans

50

Total liabilities and equity

480

Premises and equipment

20

Reserve for loan losses

-10

Total assets

$480

The off-balance-sheet items are (in millions of dollars):

Off-Balance-Sheet Items

Face Value

U.S. Depository Institution Counterparty

Loan commitments:<1 year

10

Loan commitments:>1 year

20

Commercial letters of credit

50

State and Local Government Counterparty

Loan commitments:>1 year

100

Standby letters of credit:Performance-related

20

Corporate Customer Counterparty

Loan commitments:<1 year

20

Loan commitments:>1 year

10

Standby letters of credit:Direct-credit substitute

50

Commercial letters of credit

60

Under the Basel III, calculate each following question:

  1. (8 pts) What is the risk-adjusted on-balance-sheet assets of the bank ? You must show clearly each weight of your asset.

  1. (8 pts) What is the off-balance-sheet assets of the bank ? You must show clearly each weight of your asset.

  1. (4 pts) What are the CET1, Tier1, and total capital required for both off- and on-balance-sheet assets.

(2 pts) Please list clearly each item for Tier 1 capital, additional Tier 1, and Tier II capital

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