Week 6 Assignment 2pages and references

As a consultant, you have been asked to assess a bank’s sources and uses of funds, and to offer recommendations on how it can restructure its sources and uses of funds to improve its performance. This bank has traditionally focused on attracting funds by offering certificates of deposit (CDs). It offers checking accounts and money market deposit accounts (MMDAs), but it has not advertised these accounts because it has obtained an adequate amount of funds from the CDs. It pays about 3 percentage points more on its CDs than on its money market deposit accounts, but the bank prefers knowing the precise length of time that it can use the deposited funds. (The CDs have a specified maturity whereas the MMDAs do not.) Its cost of funds has historically been higher than that of most banks, but it has not been concerned because its earnings have been relatively high. The bank’s use of funds has historically been focused on local real estate loans to build shopping malls and apartment complexes. The real estate loans have provided a very high return over the last several years. However, the demand for real estate in the local area has slowed.

Should the bank continue to focus on attracting funds by offering CDs, or should it push its other types of deposits?
should the bank continue to focus on real estate loans? If the bank reduces its real estate loans, where  should the funds be allocated?
How will the potential return on the bank’s uses of funds be affected by your restructuring of the asset portfolio? How will the cost of funds be affected by your restructuring of the bank liabilities?
Should the bank engage in off-balance sheet activities? What types? What are the regulatory issues with these activities?

Don't use plagiarized sources. Get Your Custom Essay on
Week 6 Assignment 2pages and references
Just from $13/Page
Order Essay
Order your essay today and save 20% with the discount code: OFFNOW

Order a unique copy of this paper

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
Top Academic Writers Ready to Help
with Your Research Proposal
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code OFFNOW