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  3. the main ways in which banks can meet countercycli

The main ways in which banks can meet countercyclical capital buffer requirements include: Reduce...

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Accounting

The main ways in which banks can meet countercyclical capital buffer requirements include:

  1. Reduce their voluntary capital buffers, leaving overall capital ratios unchanged.
  2. Raise capital, through equity issues or higher retained earnings.
  3. Reduce risk-weighted assets, by reducing exposures (including lending).
  4. Rebalancing away from higher risk-weighted assets.
  5. All of the answers.

Which of the following represent off-balance-sheet activities of commercial banks?

  1. A customer deposits $1 million in a regular bank deposit account.
  2. A customer chooses to transfer the deposit to a money market mutual fund account sponsored by the same bank.
  3. The bank makes a loan for $1 million.
  4. The bank securitizes the loan as a pool of loans that are sold off to investors.
  5. Both (b) and (d).

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