cost of funds

cost of funds
United Kingdom
The cost of borrowing money. In the context of lending, it means:
• The cost to the lender (typically a bank) of borrowing in an interbank market to enable it to fund the loan it has agreed to provide to the borrower. For example, the cost of borrowing in the London Interbank Market is typically the London Interbank Offered Rate together with any mandatory costs.
• The cost to the borrower of borrowing the loan from the lender.
In each case the cost comprises the aggregate of interest and fees on the principal amount borrowed. The cost of funds of an entity may be determined by a number of factors, including its credit rating.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Cost Of Funds — The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one of the most important input costs for a financial institution, since a lower cost will generate better returns when the… …   Investment dictionary

  • cost-of-funds index — ( COFI) The weighted average interest rate paid by savings institutions to obtain funds. There are national and regional cost of fund indexes. The most common is the 11th District Federal Home Loan Bank COFI. A specific COFI index may be used as… …   Financial and business terms

  • Cost of Funds Index — A Cost of Funds Index or COFI is a regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans. The interest rate on an adjustable rate mortgage, for example, is… …   Wikipedia

  • Cost of funds index — A cost of funds index or COFI is a regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans. The interest rate on an adjustable rate mortgage, for example, is… …   Wikipedia

  • cost of funds — 1) The cost to banks of borrowing in the principal money markets, which determines their rates of interest when lending to their customers. 2) The cost to an organization of raising additional loan capital …   Big dictionary of business and management

  • Cost of funds — Interest rate associated with borrowing money. The New York Times Financial Glossary …   Financial and business terms

  • cost of funds — interest rate associated with borrowing money. Bloomberg Financial Dictionary …   Financial and business terms

  • Marginal Cost Of Funds — The incremental cost of borrowing more money to fund additional asset purchases or investments. In its simplest calculation, the marginal cost of funds is simply the interest rate on the new loan balance. Marginal cost of funds is often confused… …   Investment dictionary

  • Pooled Cost Of Funds — A formula for finding the cost of funds. The pooled cost of funds is determined by dividing the balance sheet into several different categories of specific interest earning assets. These assets are then matched against corresponding interest… …   Investment dictionary

  • 11th District Cost of Funds Index - COFI — A monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in the states of Arizona, California and Nevada. Published on the last day of each month, the COFI represents the… …   Investment dictionary

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”