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Financial Markets and Institutions

What is the contribution to the asset base of the following items under the Basel II requirements? Under the U.S. capital-to-assets rule?
â?¢ $10 million cash reserves.
â?¢ $50 million 91-day U.S. Treasury bills.
â?¢ $5 million U.K. government bonds, AAA rated.
â?¢ $1 million general obligation municipal bonds.
â?¢ $40 million repurchase agreements (against U.S. Treasuries).
â?¢ $500 million one- to four-family home mortgages.
â?¢ $500 million commercial and industrial loans, BBB rated.
â?¢ $100,000 performance-related standby letters of credit to a blue chip corporation.
â?¢ $7 million commercial letter of credit to a foreign, A rated corporation.
â?¢ $8 million bankers acceptance conveyed to a U.S., AA rated corporation.
â?¢ $17 million three-year loan commitment to a private agent.
â?¢ $17 million three-month loan commitment to a private agent.
â?¢ $30 million standby letter of credit to back a corporate issue of commercial paper.
â?¢ $4 million five-year interest rate swap with no current exposure (the counterparty is a private agent).
â?¢ $6 million two-year currency swap with $500,000 current exposure (the counterparty is a private agent).

Solution Summary

What is the contribution to the asset base of the following items under the Basel II requirements? Under the U.S. capital-to-assets rule?

$2.19