Bernard Bank Balance Sheet Asset $ Liabilities & OE $ Cash 8000 Demand deposit 70000 Reserve 2000 Time deposit 85000 Marketable securities 8000 Other borrowing 45000 Inventory 2000 Accruals 2000 Corporate Loans 90000 N/P 1000 Loans to wealth management 15000 Total Liabilities 203000 21 Page Mortgage 30000 OE 17000 Unsecured loan 20000 Loan to PLC 30000 Consumer loan 10000 N/R 1000 Land 3000 Equipments 1000 Total Assets 220000 Total Liabilities & OE 220000 Off balance sheet items $ Standby letter of credit 20000 Long term credit commitments 10000 Total off balance sheet 30000 Tier 1 Capital is $20,000 and Tier 2 capital is $15,000 (SLC Conversion factor 20%, Unused loan commitment conversion factor 20%) According to BASELI, 3 Page (Risk-weighting category: 0% for cash, reserve and marketable securities, 20% for Deposit at other banks and SLC, 50% for home loans, 100% for all loans, Unused commitment) You need to find out if the Bernard Bank is BASEL I compliant and at the same time their interest rate GAP status. If they are not BASEL I compliant, what do they need to do to ensure compliance? Also, if the government decreases treasury bill yield, how will that affect the bank's NIM? You need to be very specific about your recommendations. Bernard Bank Balance Sheet Asset $ Liabilities & OE $ Cash 8000 Demand deposit 70000 Reserve 2000 Time deposit 85000 Marketable securities 8000 Other borrowing 45000 Inventory 2000 Accruals 2000 Corporate Loans 90000 N/P 1000 Loans to wealth management 15000 Total Liabilities 203000 21 Page Mortgage 30000 OE 17000 Unsecured loan 20000 Loan to PLC 30000 Consumer loan 10000 N/R 1000 Land 3000 Equipments 1000 Total Assets 220000 Total Liabilities & OE 220000 Off balance sheet items $ Standby letter of credit 20000 Long term credit commitments 10000 Total off balance sheet 30000 Tier 1 Capital is $20,000 and Tier 2 capital is $15,000 (SLC Conversion factor 20%, Unused loan commitment conversion factor 20%) According to BASELI, 3 Page (Risk-weighting category: 0% for cash, reserve and marketable securities, 20% for Deposit at other banks and SLC, 50% for home loans, 100% for all loans, Unused commitment) You need to find out if the Bernard Bank is BASEL I compliant and at the same time their interest rate GAP status. If they are not BASEL I compliant, what do they need to do to ensure compliance? Also, if the government decreases treasury bill yield, how will that affect the bank's NIM? You need to be very specific about your recommendations