Own funds: Difference between revisions
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== See also == | == See also == | ||
* [[Borrowed funds]] | |||
* [[Capital]] | * [[Capital]] | ||
* [[Capital Requirements Regulation]] | * [[Capital Requirements Regulation]] | ||
Revision as of 06:38, 19 September 2016
Bank prudential management.
Broadly speaking, in bank funding and capital management, 'own funds' means the bank's own capital.
Own funds are a very stable source of funding, because there is either no contractual obligation to repay them, or only a limited obligation.
Other sources of the bank's funding are 'borrowed' funds.
The Capital Requirements Regulation defines a bank's own funds as the sum of its Tier 1 capital and Tier 2 capital.
In other contexts, the term 'own funds' is also used in a narrower sense, limited - for example - to the bank's equity capital (CET1).
