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?
