The following is the balance sheet numbers reported by Bay Bank for 2020. Based on Basel 1 standards, are the banks adequately capitalized? (in millions) US Treasury Bonds $25 Deposits $297.00 Municipal Bonds $15 Mortgages $75 Bonds (Tier 2 Capital) $8.00 Loans $200 Equity (Tier 1 Capital) $10.00 Total $315 $315.00 A Yes, they have sufficient Tier 1 and Tier 1+2 capital b No, they do not have sufficient Tier 1 or Tier 1+2 capital c No, they have sufficient Tier 1 but insufficient Tier 1+2 capital d No, they do have sufficient Tier 1+2 capital but insufficient Tier 1 capital
The following is the
| (in millions) | ||||
| US Treasury Bonds | $25 | Deposits | $297.00 | |
| Municipal Bonds | $15 | |||
| Mortgages | $75 | Bonds (Tier 2 Capital) | $8.00 | |
| Loans | $200 | Equity (Tier 1 Capital) | $10.00 | |
| Total | $315 | $315.00 |
| A |
Yes, they have sufficient Tier 1 and Tier 1+2 capital
|
|
| b |
No, they do not have sufficient Tier 1 or Tier 1+2 capital
|
|
| c |
No, they have sufficient Tier 1 but insufficient Tier 1+2 capital
|
|
| d |
No, they do have sufficient Tier 1+2 capital but insufficient Tier 1 capital |
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