1. Explain Basel III in detail. Go to Investopedia and read, for example, “What is Basel III” by Margaret James, July 11, 2020, and “Understanding the Basel III International Regulations” by Brian Perry June 27, 2019. What is the likely impact on the financial system and economic growth?
2. Both capital adequacy and liquidity are important when evaluating a bank’s overall risk exposure. This problem focuses on both. Go to the FDIC site and obtain data for Wells Fargo and $250B-plus assets commercial bank peer group. Look up the following ratios for WF and $250B-plus banks for each of the following years ended December 31: 2020, 2012, 2008 and 2000:
a. Leverage, Tier 1 risk-based capital, and Total risk-based capital ratios in Performance and Condition Ratios;
b. Cash and due from depository institutions in Assets and Liabilities.
