TABLE 13-28 Risk Weights for Calculating Risk-Weighted Assets for On-Balance-Sheet Items under Basel III banks (MDBs) An exposure to the BIS, the ECB, the European Commission, the IMF, or an MDB 3. Exposures to government-sponsored entities (GSEs) An exposure to a GSE other than an equity exposure or preferred stock 5. Exposures to public-sector entities (PSEs): General obligation exposures to U.S.PSE: Revenue obligation exposures to U.S.PSEs 20 General obligation exposures to non-U.S. PSEs: CRC of 0-1 CRC of 2 CRC of 3 CRC of 4-7 OECD member with no CRC 20 50 100 150 20 the Treasury, October 11, 2013. Onshore Bank has $38 million in assets, with risk-weighted assets of $28 million. Core Equity Tier 1(CET1) capital is $1,300,000, additional Tier I capital is $520,000, and Tier II capital is $436,000. The current value of the CET1 ratio is 4.64 percent, the Tier I ratio is 6.5 percent, and the total capital ratio is 8.06 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $118,000 of common stock with cash. b. The bank issues $3.8 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. c. The bank receives $518,000 in deposits and invests them in T-bills, d. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an At credit rating. e. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $5.8 mililion of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to build new ATMs. Complete this question by entering your answers in the tabs below. The bank repurchases $118,000 of common stock with cash. (Round your percentage answers to 2 decimal places, (e. 9. 32.16)) additional Tier I capital is $520,000, and Tier Il capital is $436,000. The current value of the CET1 ratio is 4.64 percent, the Tier I ratio is 6.5 percent, and the total capital ratio is 8.06 percent. Calculate the new value of CETI, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $118,000 of common stock with cash. b. The bank issues $3.8 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. c. The bank receives $518,000 in deposits and invests them in T-bills. d. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. e. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $5.8 million of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to build new ATMs. Complete this question by entering your answers in the tabs below. The bank repurchases $118,000 of common stock with cash. (Round your percentage answers to 2 decimal places. (e.9., 32.16)) Complete this question by entering your answers in the tabs below. The bank issues $3.8 milion of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. (Round your percentage answers to 2 decimal places. (e.9.32.16) ) Complete this question by entering your answers in the tabs below. The bank recelves $518,000 in deposits and invests them in T-bilis. (Round your percentage answers to 2 decimal places. (e.9.,32.16)) Complete this question by entering your answers in the tabs below. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. (Round your percentage answers to 2 decimal places. ( e.g. 32,16) ) Complete this question by entering your answers in the tabs below. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. (Round your percentage answers to 2 decimal places. (e.g., 32.16)) Complete this question by entering your answers in the tabs below. Homeowners pay back $5.8 million of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to bulld new ATMs. (Round your percentage answers to 2 decimal places. (e,9,32.16) ) TABLE 13-28 Risk Weights for Calculating Risk-Weighted Assets for On-Balance-Sheet Items under Basel III banks (MDBs) An exposure to the BIS, the ECB, the European Commission, the IMF, or an MDB 3. Exposures to government-sponsored entities (GSEs) An exposure to a GSE other than an equity exposure or preferred stock 5. Exposures to public-sector entities (PSEs): General obligation exposures to U.S.PSE: Revenue obligation exposures to U.S.PSEs 20 General obligation exposures to non-U.S. PSEs: CRC of 0-1 CRC of 2 CRC of 3 CRC of 4-7 OECD member with no CRC 20 50 100 150 20 the Treasury, October 11, 2013. Onshore Bank has $38 million in assets, with risk-weighted assets of $28 million. Core Equity Tier 1(CET1) capital is $1,300,000, additional Tier I capital is $520,000, and Tier II capital is $436,000. The current value of the CET1 ratio is 4.64 percent, the Tier I ratio is 6.5 percent, and the total capital ratio is 8.06 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $118,000 of common stock with cash. b. The bank issues $3.8 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. c. The bank receives $518,000 in deposits and invests them in T-bills, d. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an At credit rating. e. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $5.8 mililion of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to build new ATMs. Complete this question by entering your answers in the tabs below. The bank repurchases $118,000 of common stock with cash. (Round your percentage answers to 2 decimal places, (e. 9. 32.16)) additional Tier I capital is $520,000, and Tier Il capital is $436,000. The current value of the CET1 ratio is 4.64 percent, the Tier I ratio is 6.5 percent, and the total capital ratio is 8.06 percent. Calculate the new value of CETI, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $118,000 of common stock with cash. b. The bank issues $3.8 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. c. The bank receives $518,000 in deposits and invests them in T-bills. d. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. e. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $5.8 million of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to build new ATMs. Complete this question by entering your answers in the tabs below. The bank repurchases $118,000 of common stock with cash. (Round your percentage answers to 2 decimal places. (e.9., 32.16)) Complete this question by entering your answers in the tabs below. The bank issues $3.8 milion of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. (Round your percentage answers to 2 decimal places. (e.9.32.16) ) Complete this question by entering your answers in the tabs below. The bank recelves $518,000 in deposits and invests them in T-bilis. (Round your percentage answers to 2 decimal places. (e.9.,32.16)) Complete this question by entering your answers in the tabs below. The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. (Round your percentage answers to 2 decimal places. ( e.g. 32,16) ) Complete this question by entering your answers in the tabs below. The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. (Round your percentage answers to 2 decimal places. (e.g., 32.16)) Complete this question by entering your answers in the tabs below. Homeowners pay back $5.8 million of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to bulld new ATMs. (Round your percentage answers to 2 decimal places. (e,9,32.16) )
