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 ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center