Encumbered: Difference between revisions
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Revision as of 21:48, 29 October 2016
An asset is said to be 'encumbered' when it is subject to a right enjoyed by someone other than the owner of the asset.
For the purposes of bank liquidity liquidity regulation, an asset may be considered encumbered if:
- It has been pledged; or
- It is subject to any arrangement to secure, collateralise or credit enhance any transaction from which it cannot be freely withdrawn.