Encumbered

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is subject to any arrangement to secure, collateralise or credit enhance any transaction from which it cannot be freely withdrawn.

See also

• Collateral
• Encumbrance
• Unencumbered