Western Bank has the following entries on its balance sheet (expressed in $billion).

ESF	12
Accumulated retained profit	200
Certificates of Deposits on issue	630
Loans to households	752
Capital notes on issue	14
Demand deposits of customers	150
Shares on issue	16
Provisions for bad and doubtful debt for loans to households	4
Loans to another bank	200
Capital Reserve	20
Shares investment (trading)	40
Government securities (available for sale)	30

a) (i) Build Western Banks balance sheet incorporating all the above items. [Incorporate all the items in one single balance sheet. Identify clearly the balance sheet item name and the value.]

(ii) Identify the components of Western Banks regulatory total capital and calculate Western Banks regulatory total capital.

b) Starting from the situation described in a) consider the following operations:

(1) The market value of the shares held by Western Bank for trading purposes decreases by $6 billion.

(2) The market value of the government bonds held by Western Bank for liquidity purposes increases by $4 billion.

(3) Western Bank writes off $10 billion of loans made to households, and has access to the lending provisions from a).

(4) Western Bank receives $15 billion coupons from governments that do NOT have an account in the bank.

(5) Western Bank buys company cars for $0.1 billion from a dealer that is a customer of the bank.

(i) Using one new balance sheet (separate from the one in a), represent the effect of the 5 operations above on the balance sheet of Western Bank. [Only represent variations, not new levels. Identify clearly the balance sheet item name, the variation sign and the value. Indicate the numbering of the transaction at the end of each entry. You are allowed to add new entry names if you need them]