a) FIM Bank has the following balance sheet (in millions), with the risk weights in parentheses. The bank has no off balance sheet activities.

Assets		Liabilities and Equity
Cash (0%)	$10	Deposits	$271
OECD interbank deposits (20%)	10	Subordinated debts (10 years)	2
Mortgage loans (50%)	160	Non cumulative (perpetual) preference shares	2
Consumer loans (100%)	100	Equity	5
Total Assets	$280	Total liabilities and equity	$280

Assuming that operational risk and market risk are both zero, does the bank have enough capital to meet the Basel III Common Equity Tier 1, Total Tier 1, Total capital requirements? (1 mark)

(b) Explain the reasons why some off-balance sheet instruments are excluded in the calculation of credit risk adjusted off-balance sheet asset value

(c) Explain how capital buffers imposed in Basel III attempt to address counter cyclical and systemic risk issues of Basel II

(d) Explain why Basel III capital requirements are still unable to create a level competitive playing field across all banks on a global level