ABSTRACT
A bank’s funding base has four major components:
Equity and debt capital.
So-called ‘free funds’, which comprise non-interest bearing accounts where the cost of funds is related solely to operating expenses.
Retail deposits taken at advertised rates, which may include interest-bearing current account balances, call, notice, savings and fixed rate deposits.
Market-related deposits, which comprise all those deposits taken at money market rates and at related rates, including funds raised from the issue of short term money market instruments.
