consider a bank with the following balance sheet 637384
Consider a bank with the following balance sheet:
Assets |
Liabilities |
||
Required Reserves |
$8 million |
Checkable Deposits |
$100 million |
Excess Reserves |
$3 million |
Bank Capital |
$6 million |
T bills |
$45 million |
|
|
Commercial Loans |
$50 million |
|
|
The bank commits to a loan agreement for $10 million to a commercial customer. Calculate the bank’s capital ratio before and after the agreement. Calculate the bank’s risk weighted assets before and after the agreement. Problems 4 through 11 relate to a sequence of transactions at Oldhat Financial.