Question One Njenge Bank has the following balance sheet (in millions) with the risk weights in parentheses. In addition, the bank has K30 million in performancerelated standby letters of credit (SLCs), and K300 million in six-year interest rate swaps. Credit conversion factors follow: Performance-related standby LCs 50% 1-5 year foreign exchange contracts 5% 1-5 year interest rate swaps 0.5% 5-10 year interest rate swaps 1.5% Required a. What are the risk-adjusted on-balance-sheet assets of the bank as defined under the Basle Accord? (5 Marks) b. What is the total capital required for both off- and on-balance-sheet assets? (5 Marks) c. Does the bank have enough capital to meet the Basle requirements? If not, what minimum Tier 1 or total capital does it need to meet the requirement? (5 Marks) d. Discuss the major shortcomings of the Basle I accord