Question: The lending function of depository institutions is highly regulated and this chapter gives some examples of the structure of these regulations for national banks. In this problem you are asked to apply those regulations to Tea Rose National Bank (TRNB). Tea Rose has the following sources of funds: $200 million in capital and surplus, $100 million in demand deposits, $800 million in time and savings deposits, and $200 mil-lion in subordinated debt.
a. What is the maximum dollar amount of real estate loans that TRNB can grant?
b. What is the maximum dollar amount TRNB may lend to a single customer?