Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Does the bank have sufficient liquid capital to cushion any unexpected losses as per the Basle III requirement? (ignore cyclical buffer requirement) The book value
Does the bank have sufficient liquid capital to cushion any unexpected losses as per the Basle III requirement? (ignore cyclical buffer requirement)
The book value of DRAGON SLAYER BANK's balance sheet is listed below. The current market yield for the securities is in parentheses. The amounts are in millions. Asset Liability & Equit Cash 6 month T-bills (4.25%) Demand deposits 300 50 100 100 90 100 350 Savings accounts (2.0%) 3 month CD (2.50%) 9 months CDs (3.85%) 1 year term deposit (4.0%) 2 year term deposits (4.30%) 205 150 150 520 200 2 year personal fixed rate loan at 6.50% 3 year T bills (4.85%) 3 year 5.5% semi-annual coupon T-notes (5.25%) 5 year 6.2% semi-annual coupon T-notes (5.75%) 5 year personal loan (11.5%, repriced yearly) 150 250 5 year bond 8.0% annual coupon issued by Spanish government with rating credit rating EB 5-year bonds at 6.75% semiannual interest, balloon payment 250 20-year bonds at 7.5% interest, balloon payment 10 year commercial loan (12.25% repriced @ 6 months) 730 Subordinate notes: 220 230 15-year commercial loan at 10% interest (repriced monthly) 3-year fixed rate (5.65%) 150 20-year sovereign bonds 12.0% annual-coupon issued by Cambodian government with BB rating 6-year fixed rate (6.00%) 150 Ordinary Equity Preference shares 20 20 390 20-year mortgages at 8.5% interest (LVR 65%, no mortgage insurance), balloon payment Retained Earnings 40 Total Assets 2485 Total liability and equity 2485 The book value of DRAGON SLAYER BANK's balance sheet is listed below. The current market yield for the securities is in parentheses. The amounts are in millions. Asset Liability & Equit Cash 6 month T-bills (4.25%) Demand deposits 300 50 100 100 90 100 350 Savings accounts (2.0%) 3 month CD (2.50%) 9 months CDs (3.85%) 1 year term deposit (4.0%) 2 year term deposits (4.30%) 205 150 150 520 200 2 year personal fixed rate loan at 6.50% 3 year T bills (4.85%) 3 year 5.5% semi-annual coupon T-notes (5.25%) 5 year 6.2% semi-annual coupon T-notes (5.75%) 5 year personal loan (11.5%, repriced yearly) 150 250 5 year bond 8.0% annual coupon issued by Spanish government with rating credit rating EB 5-year bonds at 6.75% semiannual interest, balloon payment 250 20-year bonds at 7.5% interest, balloon payment 10 year commercial loan (12.25% repriced @ 6 months) 730 Subordinate notes: 220 230 15-year commercial loan at 10% interest (repriced monthly) 3-year fixed rate (5.65%) 150 20-year sovereign bonds 12.0% annual-coupon issued by Cambodian government with BB rating 6-year fixed rate (6.00%) 150 Ordinary Equity Preference shares 20 20 390 20-year mortgages at 8.5% interest (LVR 65%, no mortgage insurance), balloon payment Retained Earnings 40 Total Assets 2485 Total liability and equity 2485
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started