Funding risk

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1. Bank funding.

In the bank liquidity and funding context, funding risk arises in the context of illiquid asset positions.

In this situation, funding risk means the risk of inability to obtain the necessary funding for the illiquid asset positions on the expected terms and when required.

2. Pensions funding.

In the pensions context, funding risk arises in the context of defined benefit pensions schemes, especially ones in deficit.

In this context, funding risk means the obligation to make additional contributions to the pension fund, to make up shortfalls.

3. Finance & funding.

More broadly, any risk relating to securing - or maintaining - access to borrowing or other sources of funding to meet an undertaking's operational needs.

See also