What is the Basle Agreement?How does it require banks to hold more capital? How does the Basle Agreement attempt to narrow the definition of bank capital?Why? What is "prompt corrective action"?What happens to firms that fall below certain standards? What are "Off-Balance-Sheet Activities"?How does Basle treat them versus prior legislation? What are the (general) risk-weight categories under the Basel Agreement?How are these used to regulate a bank's capital? What is a common-size financial statement?How is it different for banks versus other types of firms? Explain four ratios from a set of common-size balance sheets that would let an analyst recognize a small bank from a large bank. What are the general asset categories for a bank's balance sheet?What are the relative proportions for the "average" bank? What are the general liability categories for a bank's balance sheet?What are the relative proportions for the "average" bank? What does an ROE Decomposition Analysis tell us about a bank's performance? What do we mean by a "peer" bank?What characteristics are important in picking a "peer"? What are the most important types of risk that a bank faces? What is liquidity risk for a bank?What are three different ways (ratios) for measuring liquidity risk?Explain them. What is capital risk for a bank?What are the three primary ratios used to measure capital risk? What is credit risk for a bank?How do we measure credit risk looking at the past?How do we measure it looking forward?What are 4 different ways of measuring credit risk for a bank? What is market risk?In particular, what is interest rate risk?How can we measure this type of risk at a bank?How will each type of risk (liquidity, credit, market (interest rate) and capital risk) be different for a large bank versus a small bank?How will the banks manage each risk depending upon their size? What is the loan-to-deposit ratio?Please explain the pros and cons of using the loan-to-deposit ratio for measuring or describing the risk exposure of the bank. What categories appear on a bank's income statement? What's the difference between interest income and non-interest income? What is the burden?Are there other ways of measuring expenses that work better than the burden ratio? Explain 4 cost-cutting strategies that banks (or any business) might use in hard times. What is price discrimination?How is it useful in determining a bank's product mix and fee structure? What kind of investments does a bank make?How are these different? Why do banks hold investments instead of loans?Are small bank investments different from large bank investments?Why is this the case? What are mortgage-backed securities?Are there different types?Why would investors want to buy mortgage-backed securities and not the mortgages themselves (many reasons)?