Own funds

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Revision as of 12:46, 3 September 2016 by imported>Doug Williamson (Expand. Sources: CRR, Bank of England http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2013/qb130302.pdf)
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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 used in a narrower sense, limited - for example - to the bank's equity capital.


See also