A bank has the following balance sheet ASSETS LIABILITIES Cash = 3 Retail Deposits (stable) = 25 Treasury Bonds (>1...

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Finance

A bank has the following balance sheet
ASSETS
LIABILITIES
Cash = 3 Retail Deposits (stable) = 25
Treasury Bonds (>1 year) = 5 Retail Deposits (less stable) = 15
Corporate Bonds Rated A = 4 Wholesale Deposits = 44
Residential Mortgages = 18 Preferred Stock (> 1 yr) = 4
Small Business Loans (<1 yr) = 60 Tier 2 Capital = 3
Fixed Assets = 10 Tier 1 Capital = 9
TOTAL = 100 TOTAL = 100
(a) What is the Net Stable Funding Ratio?
(b) The bank decides to satisfy Basel III by raising more retaildeposits and keeping the proceeds in Treasury bonds. What extraretail deposits need to be raised?

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A bank has the following balance sheet ASSETS Required stable funding RSF factor Required amount of stable funding Asset RSF factor LIABILITIES See Answer

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ASSETS	LIABILITIES
Cash = 3	Retail Deposits (stable) = 25
Treasury Bonds (>1 year) = 5	Retail Deposits (less stable) = 15
Corporate Bonds Rated A = 4	Wholesale Deposits = 44
Residential Mortgages = 18	Preferred Stock (> 1 yr) = 4
Small Business Loans (<1 yr) = 60	Tier 2 Capital = 3
Fixed Assets = 10	Tier 1 Capital = 9
TOTAL = 100	TOTAL = 100