Borrowed funds and Covenant: Difference between pages

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''Bank prudential management''
#A formal legal agreement to take, or not to take, certain actions.
#In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.<ref>http://www.treasurers.org/node/8842</ref>  For example, a ''financial covenant'' to maintain a minimum ratio of net worth to debt.
#In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.


Broadly speaking, in bank funding and capital management, 'borrowed funds' means all of the funding which is not the bank's own capital.


Borrowed funds are a less stable source of funding, compared with 'own funds' - the bank's own capital.
== See also ==
* [[Accounting exposure]]
* [[Asset cover]]
* [[Credit risk]]
* [[Event of default]]
* [[Financial covenant]]
* [[Incurrence covenant]]
* [[Interest cover]]
* [[Loan agreement]]
* [[Maintenance covenant]]
* [[Net worth]]
* [[Non-financial covenant]]
* [[Restrictive covenant]]
* [[Waiver]]
 
 
==References==
<references/> Treasury Essentials: Covenants, The Treasurer, March 2013




== See also ==
==Other links==
* [[Capital]]
[http://www.treasurers.org/node/5225 Loan agreement covenant performance, Will Spinney, ACT 2009]
* [[Capital adequacy]]
* [[Capital Requirements Regulation]]
* [[Capital structure]]
* [[Common Equity Tier 1]]  (CET1)
* [[Equity]]
* [[Funding]]
* [[Funding liquidity risk]]
* [[Funding risk]]
* [[Net Stable Funding Ratio]]
* [[Own funds]]
* [[Stability]]
* [[Sticky]]
* [[Tier 1]]
* [[Tier 2]]


[[Category:The_business_context]]
[[Category:Bank_Lending]]
[[Category:Debt_Capital_Markets]]
[[Category:Legal_Documentation]]
[[Category:Credit_Risk]]
[[Category:Managing_Risk]]

Revision as of 15:46, 11 January 2014

  1. A formal legal agreement to take, or not to take, certain actions.
  2. In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.[1] For example, a financial covenant to maintain a minimum ratio of net worth to debt.
  3. In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.


See also


References

  1. ↑ http://www.treasurers.org/node/8842

Treasury Essentials: Covenants, The Treasurer, March 2013


Other links

Loan agreement covenant performance, Will Spinney, ACT 2009

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