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Clayfield Bank has the following balance sheet. Assets Amount ($million) Liabilities and Equity Amount ($million) Treasury notes 30 Term deposits 130 Credit card loans 30

Clayfield Bank has the following balance sheet. Assets Amount ($million) Liabilities and Equity Amount ($million) Treasury notes 30 Term deposits 130 Credit card loans 30 Floating-rate notes 45 Mortgage loans 140 Equity 25 Total 200 Total 200

Assets

Amount ($million)

Liabilities and Equity

Amount ($million)

Treasury notes

30

Term deposits

130

Credit card loans

30

Floating-rate notes

45

Mortgage loans

140

Equity

25

Total

200

Total

200

(i) Calculate the financing gap and financing requirement for Clayfield Bank (show all workings). (4 marks)

(ii) The financing gap has recently increased due to growing credit demand. Detail two (2) liquidity strategies that can help Clayfield Bank fill this larger financing gap. (6 marks)

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