Final answer:
The student's question involves obtaining Frost Bank's 2022 Annual Report to calculate Basel I Capital Risk Ratios. The key components for these calculations include Tier 1 and Tier 2 capital, as well as risk-weighted assets. Once these figures are found in the annual report, they must be entered into a spreadsheet to calculate the Capital Adequacy Ratio (CAR).
Step-by-step explanation:
The student has asked for assistance in obtaining the 2022 Annual Report for Frost Bank (CFR) and calculating the Capital Risk Ratios for Basel I. Basel I is a set of international banking regulations developed by the Basel Committee on Banking Supervision, which sets out the minimum capital requirements for financial institutions. To calculate the Capital Risk Ratios under Basel I, you would need to know the bank's core capital and its risk-weighted assets. The main components of the Capital Adequacy Ratio (CAR), which is the main metric under Basel I, are Tier 1 capital (core capital) and Tier 2 capital (supplementary capital) divided by the risk-weighted assets.
To calculate these ratios on a spreadsheet, you would start by finding the bank's total Tier 1 and Tier 2 capital in the equity section of its balance sheet, which should be listed in the annual report. Risk-weighted assets, on the other hand, would be listed in the notes to the financial statements, as they involve weighting each asset by its corresponding risk category. The formula for the Capital Adequacy Ratio (CAR) is:
Capital Adequacy Ratio
(CAR) = (Tier 1 Capital + Tier 2 Capital) / Risk-weighted Assets.
After finding the necessary figures in the annual report, these values would be inputted into the spreadsheet to compute the ratio and determine the bank's regulatory capital adequacy.