Churchill Bank has reserves of $100m and loans to clients of $500m. In addition, it has securities assets which act as collateral for the bank's own borrowing of $280m (assume a 30% haircut was taken on the assets). The bank's only other debt is customer deposits of $500m.

a) draw up a balance sheet for Churchill Bank

b) what is the banks leverage ratio

c) what is the banks gearing

d) what is the banks reserve ratio

e) what happens to the leverage ratio if the accounting value of the banks loans is estimated to have fallen by 40%