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In: Accounting

In addition to the bank balance sheet information shown below, the bank also has an Allowance...

In addition to the bank balance sheet information shown below, the bank also has an Allowance for Loan Losses (ALL) of $10. The preferred stock shown is qualifying noncummulative perpetual preferred stock. Calculate the two required Basel I ratios and also the leverage ratio to answer the following: (1) Does this bank currently comply with Basel I capital requirements (why or why not?)? (2) Under U.S. PCA standards, what capitalization class or level does this bank currently possess and why? (Show sufficient detail in order to receive credit)

Assets

Amount

Liabilities and Equity

Amount

Cash

80

Non-interest deposits

150

Securities

NOW checking

150

U.S. Treasuries

200

MMDA

300

Fannie Mae (FNMA) MBS

70

CDs

240

Loans (net)

Fed Funds purchased

100

Home mortgage loans

150

Subordinated debt capital

5

Commercial loans

500

Preferred stock, perpetual

5

Fed funds sold

0

Common equity

40

$1,000

$1,000

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Expert Solution

ekkarill92 answered 1 year ago
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