n addition to the bank balance sheet information shown below, the bank also has an...
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Accounting
n 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
70
Non-interest deposits
150
Securities
NOW checking
150
U.S. Treasuries
160
MMDA
300
Fannie Mae (FNMA) MBS
100
CDs
240
Loans (net)
Fed Funds purchased
100
Home mortgage loans
270
Subordinated debt capital
5
Commercial loans
400
Preferred stock, perpetual
7
Fed funds sold
0
Common equity
38
$1,000
$1,000
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