Banking

Capital reserves maintained by a bank or financial institution in excess of what is needed by regulators, creditors, or internal controls are known as excess…

Residential mortgage-backed securities (RMBS) are a sort of debt-based investment that is backed by a large pool of residential mortgages (home loans). Because there is…

Proof of Funds (POF) is a letter or document certifying that there is sufficient funds (money) for a person, entity, or company to complete a…

The term agency bond is the debt issued by a government-sponsored enterprise (GSE) or a federal agency, also referred to as agency debt. Usually, though,…

The word “Hypothecation” implies giving the lender an asset as collateral security. It happens when an asset, such as income generated by the asset, is…

Schedule Bank Banks implies the financial institution that takes public deposits and extends credit to those who need it. They are a substantial part of…

Free banking is an establishment where note-issuing banks are allowed to set up in the same way as any other type of business. It is…

Bank reserves are the minimum cash reserves that financial institutions must keep in their vaults at any given time. These are a commercial bank’s cash holdings…

A Regulatory Capital (also known as capital adequacy) is the amount of capital a bank or another financial institution has to have as required by…

Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital in relation to its risk-weighted assets and current liabilities. It is also known as…

Tier 2 capital includes a number of important and legitimate constituents of a bank’s capital requirement. It is designated as supplementary capital and is composed…

Tier 1 capital is the primary funding source of the bank. It is the core measure of a bank’s financial strength from a regulator’s point…