Chapter 16: Basel II.5, Basel III, and Other Post-Crisis Changes
16.13
Explain one way that the Dodd–Frank Act is in conflict with (a) the Basel international
regulations and (b) the regulations introduced by other national governments.
The Basel international regulations make extensive use of external ratings (e.g., from Moody’s,
16.14.
A bank has the following balance sheet
Cash 3 Retail Deposits (stable) 25
Treasury Bonds (>1
year)
5 Retail Deposits (less
stable)
15
(a) What is the Net Stable Funding Ratio?
(b) The bank decides to satisfy Basel III by raising more retail deposits and
keeping the proceeds in Treasury bonds. What extra retail deposits need
to be raised?
The amount of stable funding is
5.720.1165.0448.0159.025