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both a and b, thanks. FIM Bank has the following balance sheet (in millions), with the risk weights in parentheses. The bank has no off
both a and b, thanks. 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 30 Deposits 185 (Risk Weight=0%) OECD interbank deposits 35 Subordinated Debt (10 years maturity) 8 (Risk Weight-20%) Mortgage Loans (Risk Weight-50%) 70 Non cumulative (perpetual) preference shares 5 Consumer Loans (Risk Weight -100%) 70 Equity 7 Total Assets 205 Total Liabilities and Equity 205 Equity 203 (a) Assuming that operational risk and market risk are zero, does the bank have enough capital to meet the Basel III Common Equity Tier 1, Total Tier 1 and Total capital requirements? [6 marks) (b) In lectures, we discussed the strengths and weaknesses of risk-based capital requirements. Discuss the weaknesses of risk-based capital requirements under the Basel Ill framework. [4 marks] HTML Editora B I VA - A - IX EE 1
both a and b, thanks.
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