Give a brief assessment as to whether the bank is facing any other risks in its current operations and if so, outline a strategy with recommendations to address/manage such risks. In this strategy you may include recommendations that can be implemented in the medium to long run in managing the risk as well as improving the bank's profitability.

Change in Rates (basis points)

Duration of IRF

b ratio

30

9.25

0.9

The bank balance sheet

 

Assets	($ million)	Duration (years)
Reserves and cash items	600	0
Securities
Less than 1 year	800	0.4
1 to 2 years	500	1.6
Greater than 2 years	1300	7
Residential mortgages
Variable-rate	1000	0.5
Fixed-rate (30-year)	2000	6
Commercial loans
Less than 1 year	1500	0.7
1 to 2 years	1000	1.4
Greater than 2 years	2500	4
Physical assets	5000	0
Totals Assets	16200
Liabilities and Equity
Checkable deposits	2500	2
Money market deposit accounts	700	0.1
Savings deposits	1500	1
CDs
Variable-rate	1000	0.5
Less than 1 year	1500	0.2
1 to 2 years	500	1.2
Greater than 2 years	500	2.7
Overnight funds	500	0
Borrowings
Less than 1 year	1000	0.3
1 to 2 years	500	1.3
Greater than 2 years	500	3.1
Total liabilities	10700
Equity (K)	5500
Total Liabilities and Equity	16200