Please explain clearly and specifically.

Deregulation of banks in Japan set off a lending boom in real estate in the early 1990s, and real estate values increased rapidly.

(a) Explain the impact of the real estate boom on the balance sheet of banks, especially the capital/asset ratio, assuming either

i. Book value or historic accounting

ii. Fair value or marked to market accounting

(b) Property values eventually crashed, leaving banks with many bad loans. Explain the impact of the fall in real estate prices on the capital/asset ratio assuming

i. Book value or historic accounting

ii. Fair value or marked to market accounting

(c) Banks in the US are required to hold loan loss reserves. Describe the role of loan loss reserves in maintaining solvency of a bank.

(d) Banks need to increase their capital/asset ratio. Describe three ways to alter the capital asset ratio.