Consortium Bank

AAA

DEFINITION of 'Consortium Bank'

A subsidiary bank created by numerous banks. A consortium bank is created to fund a specific project (such as providing affordable homeownership for low- and moderate-income home buyers) or to execute a specific deal (such as selling loans in the loan syndication market).

The consortium leverages individual banks' assets to achieve its objectives. All member banks have equal ownership shares – no one member has a controlling interest. After the bank's objective is met the consortium typically dissolves.

INVESTOPEDIA EXPLAINS 'Consortium Bank'

Consortium banks originated in the early 1960s and are predominantly found in Europe. They were originally created to enable smaller banks to participate in international banking activities. Consortium banks are not as active as in the past; however, examples can still be found both in the U.S. and overseas. Member banks can be headquartered in different countries.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Bank

    A financial institution licensed as a receiver of deposits. There ...
  3. Foreign Branch Bank

    A type of foreign bank that is obligated to follow the regulations ...
  4. Subsidiary Bank

    A type of foreign bank that is incorporated in the host country ...
  5. Agent Bank

    A bank that acts in some capacity on behalf of another bank. ...
  6. Average Revenue Per User (ARPU)

    A measure of how much income a business generates, given the ...
Related Articles
  1. What Is International Trade?
    Personal Finance

    What Is International Trade?

  2. Getting Into International Investing ...
    Mutual Funds & ETFs

    Getting Into International Investing ...

  3. What Is The World Bank?
    Insurance

    What Is The World Bank?

  4. An Introduction To The International ...
    Fundamental Analysis

    An Introduction To The International ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center