Question
In addition to the bank balance sheet information shown below, the bank also has an Allowance for Loan Losses (ALL) of $10. The preferred stock
In addition to the bank balance sheet information shown below, the bank also has an Allowance for Loan Losses (ALL) of $10. The preferred stock shown is qualifying noncummulative perpetual preferred stock. Calculate the two required Basel I ratios and also the leverage ratio to answer the following: (1) Does this bank currently comply with Basel I capital requirements (why or why not?)? (2) Under U.S. PCA standards, what capitalization class or level does this bank currently possess and why? (Show sufficient detail in order to receive credit)
Assets | Amount |
| Liabilities and Equity | Amount |
Cash | 80 |
| Non-interest deposits | 150 |
Securities |
|
| NOW checking | 150 |
U.S. Treasuries | 200 |
| MMDA | 300 |
Fannie Mae (FNMA) MBS | 70 |
| CDs | 240 |
Loans (net) |
|
| Fed Funds purchased | 100 |
Home mortgage loans | 150 |
| Subordinated debt capital | 5 |
Commercial loans | 500 |
| Preferred stock, perpetual | 5 |
Fed funds sold | 0 |
| Common equity | 40 |
| $1,000 |
|
| $1,000 |
i need the awenser be writing as explaining thank you
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