hard · Corporate Credit Analysis cca-core
A bank, 'EuroBank AG', has a Common Equity Tier 1 (CET1) ratio of 12% and a Supplementary Leverage Ratio (SLR) of 4%.
If the bank increases its holdings of zero-risk-weight sovereign bonds by 10%, funded by new deposits, what is the impact on its ratios?
- Both ratios increase
- Both ratios decrease
- CET1 ratio is stable; SLR decreases
- CET1 ratio decreases; SLR is stable
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