Diminishing returns and Notional pooling: Difference between pages

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The Law of diminishing returns is a theory describing the contribution to total production which is expected to result from the addition of extra units of one factor of production.
''Banking''. 
 
The technique used by banks for calculating interest on balances in a notional cash pool.
 
Excess funds in the accounts of a company or its subsidiaries are used to offset deficits in other company accounts for the purpose of determining interest earned or owed.
 
Notional pooling is also referred to as interest offset pooling.


According to the law of diminishing returns the contribution of the extra factors of production may rise at first, but after some point will always start to fall.  So that ultimately the marginal returns from further extra factors of production will become smaller and smaller.


== See also ==
== See also ==
* [[Marginal revenue]]
* [[Cash pool]]
* [[CertICM]]
* [[Cross-guarantees]]
* [[Interest rate enhancement]]


[[Category:Long_term_funding]]
[[Category:Cash_management]]

Revision as of 08:14, 29 November 2014

Banking.

The technique used by banks for calculating interest on balances in a notional cash pool.

Excess funds in the accounts of a company or its subsidiaries are used to offset deficits in other company accounts for the purpose of determining interest earned or owed.

Notional pooling is also referred to as interest offset pooling.


See also