How much capital the bank would have to hold

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Question - The Basel Capital Accords are the most important of the regulations that banks must satisfy. Consider a bank with the following assets on its balance sheet.

Asset

Amount ($m)

Risk Weighting (%)

Cash

200

0

Government Debt

800

10

Bank Debt

1,300

20

Mortgages

4,600

50

Commercial Loans

2,400

100

Required - If this bank was required to hold 8% of its risk weighted assets as capital, calculate how much capital the bank would have to hold?

Reference no: EM133127682

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