How cet capital is equal to total equity


Question: The RWA density of a bank is 30 % and total assets amount to 10 000 at the end of 2022. Total assets will increase by 500 per year until end of 2023 and thereafter by 2 %. We assume 2 % growth per year forever. The CET1 ratio at the end of 2022 is 12 % and is aimed at increasing to 14 % at the end of 2023 and decrease to 13 % at the end of 2024 and it will remain there forever. Assume that the CET1 capital is equal to total equity.

 

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Accounting Basics: How cet capital is equal to total equity
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