Own funds: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Expand and add link.) |
imported>Doug Williamson (Expand.) |
||
| Line 11: | Line 11: | ||
In other contexts, the term 'own funds' is used in a narrower sense, limited - for example - to the bank's equity capital (CET1). | In other contexts, the term 'own funds' is also used in a narrower sense, limited - for example - to the bank's equity capital (CET1). | ||
Revision as of 12:55, 3 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).
