Pooled Cost Of Funds

DEFINITION of '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-sensitive liabilities.

BREAKING DOWN 'Pooled Cost Of Funds'

The pooled cost of funds often matches assets and liabilities with similar or identical time horizons. It also charges debits and credits to the assets and liabilities, depending on the income they are earning or costing. This formula is generally adjusted for the legal reserves that banks are required to keep as a percentage of their deposits.

RELATED TERMS
  1. Negative Gap

    A situation where a bank's interest-sensitive liabilities exceed ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Repricing Opportunity

    The change in interest rate of an interest-sensitive asset or ...
  4. Other Long-Term Liabilities

    A balance sheet item that includes obligations which are not ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Total Liabilities

    The aggregate of all debts an individual or company is liable ...
Related Articles
  1. ETFs & Mutual Funds

    Pooled Funds Minimize Risk and Reward

    Pooled funds combine money from many individuals to invest in vehicles like a mutual fund or a pension fund.
  2. Personal Finance

    Swimming Pools: Costs Vs. Long-Term Value

    Consider the costs of installing and maintaining a swimming pool, and compare this with the pool's utility and the market value it adds to your home.
  3. Entrepreneurship & Small Business

    Understanding Total Liabilities

    Total liabilities are the combined debts an individual or company owes.
  4. Investing

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  5. Managing Wealth

    Examples Of Asset/Liability Management

    In its simplest form, asset/liability management entails managing assets and cash inflows to satisfy various obligations; however, it's rarely that simple.
  6. Markets

    An Introduction To Dark Pools

    Dark pools are an ominous-sounding term for private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public.
  7. Managing Wealth

    Breaking Down The Balance Sheet

    Knowing what the company's financial statements mean will help you to analyze your investments.
  8. Trading

    Should You Be Afraid Of Dark Pool Liquidity?

    Don't fear the deep end. Dark pool liquidity can help drive down stock cost for everyday investors.
  9. Investing

    5 Tips For Reading A Balance Sheet

    If you know how to read it, the balance sheet provides valuable information on a potential investment.
  10. Managing Wealth

    Figuring Out How To Cover Your Liability Bases

    Whenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.
RELATED FAQS
  1. What is the difference between an expense and a liability?

    Learn what liabilities and expenses are, which financial statements they are listed on, and the differences between liabilities ... Read Answer >>
  2. What items on the balance sheet are most important in fundamental analysis?

    Read about which balance sheet items are considered most important for fundamental analysis, including cash, current liabilities ... Read Answer >>
  3. What is the difference between a fixed asset and a current asset?

    Discover the difference between fixed assets and current assets and the value of each to a company. Learn the category and ... Read Answer >>
  4. How do you calculate working capital?

    The formula for calculating working capital is straightforward, but lends great insight into the shorter-term health of a ... Read Answer >>
  5. How do you calculate net debt using Excel?

    Learn about the net debt formula and how to calculate this financial metric using Microsoft Excel, including a brief explanation ... Read Answer >>
  6. What kinds of liabilities appear on the balance sheet?

    Learn what current and non-current liabilities are, the difference between the two, and examples of liabilities that a company ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center