(a) The table in Worksheet Question 2 (a) summarizes both the on-balancesheet assets (left panel) and off-balance-sheet items (right panel) of a major commercial bank ($ billion). First, compute the banks total riskweighted assets. Second, compute the banks capital adequacy ratios.(b) A bank has the balance sheet in Worksheet Question 2 (b). (1) What is the banks net stable funding ratio (NSFR)? (2) The bank issues more preferred stock and keeps the proceeds in residential mortgages in order to satisfy Basel III. What additional preferred stock does the bank need to issue?

Item Cash and due Securities Loans and leases Trading assets All other assets Not Notional covered 174.6 0.0 257.0 -10.6 464.7 -23.9 156.0 156.0 109.0 27.9 0% 140.6 129.5 10.5 0.0 6.7 Risk 20% 29.9 64.2 77.0 0.0 14.6 weight category 50% 100% 0.0 4.1 11.0 63.0 110.1 291.1 0.0 0.0 1.0 58.7 Item Notional Financial standby LC 85.2 Performance standby LC 13.0 Commercial LC 7.1 Securities lent 53.5 Other credit substitutes 0.2 Other off-balance-sheet 10.4 Unused commitment, > 1 year 111.5 Unused commitment, 1 year) Corporate bonds rated A Residential mortgages Small business loans ( 1 year) Tier 2 capital Tier 1 capital 12 23 55 2 3 5 100 Item Cash and due Securities Loans and leases Trading assets All other assets Not Notional covered 174.6 0.0 257.0 -10.6 464.7 -23.9 156.0 156.0 109.0 27.9 0% 140.6 129.5 10.5 0.0 6.7 Risk 20% 29.9 64.2 77.0 0.0 14.6 weight category 50% 100% 0.0 4.1 11.0 63.0 110.1 291.1 0.0 0.0 1.0 58.7 Item Notional Financial standby LC 85.2 Performance standby LC 13.0 Commercial LC 7.1 Securities lent 53.5 Other credit substitutes 0.2 Other off-balance-sheet 10.4 Unused commitment, > 1 year 111.5 Unused commitment, 1 year) Corporate bonds rated A Residential mortgages Small business loans ( 1 year) Tier 2 capital Tier 1 capital 12 23 55 2 3 5 100