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QUESTIONS Green Bank had $7 million of olbalance sheet loan commitments The managers of Green Bank did not think these toan commitments would be exercised

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QUESTIONS Green Bank had $7 million of olbalance sheet loan commitments The managers of Green Bank did not think these toan commitments would be exercised Green Bank earned a considere amount of foes on these loan commitments. There was a slowdown in the economy and businesses needed money, so businesses exercised their loan commitments The S7 milion loan commitments of Green Bank were all exercised You are given Green Bank's balance sheet after $7 million of off-balance-sheet loan commitments were exercised. Assets Liabilities Cash $11 milion Deposits $51 million Treasury bits $12 million Borrowing from $10 milion other banks Nonliquid assets $75 milion Shareholders $30 million equity Total 508 million Total 591 million a) Is Green Bank suffering from liability-side liquidity risk or asset sideliability. tisk? b) Suppose Green Bank decides to handle it problem of liquidity risk by Duschased liquidity management. How does this affect the balance shoot of Green Bank? Show by filling the table below. Assets Liabilities Cash Deposits Treasury bilis Borrowing from other banks Nonliquid assets Shareholders equity Total Total Farthes ATF 10 PCI O ALTFF 10 ) CW Sewa QUESTIONS Green Bank had $7 million of olbalance sheet loan commitments The managers of Green Bank did not think these toan commitments would be exercised Green Bank earned a considere amount of foes on these loan commitments. There was a slowdown in the economy and businesses needed money, so businesses exercised their loan commitments The S7 milion loan commitments of Green Bank were all exercised You are given Green Bank's balance sheet after $7 million of off-balance-sheet loan commitments were exercised. Assets Liabilities Cash $11 milion Deposits $51 million Treasury bits $12 million Borrowing from $10 milion other banks Nonliquid assets $75 milion Shareholders $30 million equity Total 508 million Total 591 million a) Is Green Bank suffering from liability-side liquidity risk or asset sideliability. tisk? b) Suppose Green Bank decides to handle it problem of liquidity risk by Duschased liquidity management. How does this affect the balance shoot of Green Bank? Show by filling the table below. Assets Liabilities Cash Deposits Treasury bilis Borrowing from other banks Nonliquid assets Shareholders equity Total Total Farthes ATF 10 PCI O ALTFF 10 ) CW Sewa

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