Assets

Cash 20 US Government bonds 80 Mortgages (50%

Liabilities

Retail Deposits (insured) 180 Wholesale deposits (unsecured, uninsured) 300 Contingent convertibles (low trigger) 10 Contingent convertibles (high trigger) 10 Junior (subordinated) long-term debt 10 Repos (secured by corporate bonds rated AAA) 100 Senior long-term debt 30 Common Equity 10

a) Calculate RWA (according to the Basel III guidelines)? b) What is common equity tier 1 regulatory capital? c) What is the additional tier 1 capital? d) What is the Tier 2 regulatory capital?

e) Does the bank capital ratio satisfy the Basel III guidelines? f) How can the bank achieve the 4.5% core equity tier 1 capital requirement?

g) What is the leverage ratio (under Basel III)?

h) Does the bank satisfy the Liquidity Coverage Ratio (under Basel III)?