Question

1.What are primary reserves and secondary reserves and what are they supposed to do?

2.What is meant by OFF-BALANCE sheet? What is the total amount of SUNCORP BANK (AUSTRALIA) off-balance

sheet items?

Answer 1

1. Primary reserves are cash held by other agencies such as Federal Reserve, long term bonds and deposits at other banks.

Secondary reserve are cash which are held in similar manner to that of primary reserve in form of short term government bonds ot commercial paper.

The secondary reserve is more liquid then the primary reserve.

These results are helping the bank in order to meet with various demands from various customers and other sources.

2. off balance sheet items are all those items which are not reflected on the balance sheet of the business and it will mean that these items will be generating assets and liabilities for the banking business but they will not be appearing on the balance sheet and it will mean that it will not impact these financial impact on the books of account but it will actually impacting the overall financial condition of the company.

Total amount of off balance sheet item is $73 million on books of accounts of suncorp bank and these loans will be consisting of various kinds of operating leases