le coût de la ressource

English translation: cost of funding

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
French term or phrase:coût de la ressource
English translation:cost of funding
Entered by: Charlotte Allen

08:38 Sep 29, 2013
French to English translations [PRO]
Bus/Financial - International Org/Dev/Coop / Discussion of Basel III banking rules
French term or phrase: le coût de la ressource
"A titre d’exemple, les Etats-Unis n’ont pas appliqué les règles en matière de liquidity, élément clé qui détermine le coût de la ressource permettant de prêter à long terme plus ou moins cher.''

This is from a highly confidential document so I'm unfortunately unable to give much more context (I could tell you but then I'd have to kill you, etc. Or rather, my client would kill me). However, the context is a discussion of Basel III, and in particular its liquidity requirements in the context of long-term lending. Here, I'm completely stumped by the second part of the sentence. What is the "ressource" referred to? When it says 'élément clé', is it referring to liquidity (i.e. it is the banks' own liquidity position that is key) or to the new liquidity rules/requirements and/or their application (i.e. it is applying the rules on liquidity which is key)?

Economics are not my specialist area, but I've grasped that the Basel III liquidity requirements are likely to have a stifling effect on long-term lending and that the banks will be required to hold a much higher ratio of assets to expected cash outflows. However, on that basis I just can't work out what this is trying to say.

Any economists care to weigh in? Help!
Charlotte Allen
United Kingdom
Local time: 22:23
cost of funding
Explanation:
Hi Charlotte,
The "ressource" is banks' funding, or what it costs them to raise the money that they then lend to households or companies or whoever.
Given the wider context (Basel III), to me it would make sense that the "élément clé" is the implementation of the liquidity rules (Europe vs US). My understanding (I'm no expert) is that the rules (liquid coverage ratio and NSFR) increase banks' cost of funding by requiring them to obtain it from more stable and longer-term sources (i.e. more expensive). This means that the interest rates banks set on their long-term loans to housheolds or companies or whoever will be higher.

I found a useful doc online from Australia's central bank explaining funding costs and lending rates (see reference). Hope that helps.
Selected response from:

William A McNab
New Zealand
Grading comment
Thank you - this was very helpful
4 KudoZ points were awarded for this answer



Summary of answers provided
5 +1cost of funding
William A McNab
3 +1the cost of the resource
Sandra & Kenneth Grossman
Summary of reference entries provided
http://cib.natixis.com/flushdoc.aspx?id=46427
Colin Morley (X)
cost of the resource
Nikki Scott-Despaigne

Discussion entries: 1





  

Answers


2 hrs   confidence: Answerer confidence 3/5Answerer confidence 3/5 peer agreement (net): +1
the cost of the resource


Explanation:
The text seems pretty clear, but I am not an economist:
The "élément clé " is whether or not they apply the rules.
The resource is the liquidity, and fact that the its cost to the banks determines interest rates.




Sandra & Kenneth Grossman
Israel
Local time: 00:23
Native speaker of: Native in EnglishEnglish, Native in RomanianRomanian
PRO pts in category: 4

Peer comments on this answer (and responses from the answerer)
agree  Nikki Scott-Despaigne
2 days 6 hrs
  -> Thanks!
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7 hrs   confidence: Answerer confidence 5/5 peer agreement (net): +1
cost of funding


Explanation:
Hi Charlotte,
The "ressource" is banks' funding, or what it costs them to raise the money that they then lend to households or companies or whoever.
Given the wider context (Basel III), to me it would make sense that the "élément clé" is the implementation of the liquidity rules (Europe vs US). My understanding (I'm no expert) is that the rules (liquid coverage ratio and NSFR) increase banks' cost of funding by requiring them to obtain it from more stable and longer-term sources (i.e. more expensive). This means that the interest rates banks set on their long-term loans to housheolds or companies or whoever will be higher.

I found a useful doc online from Australia's central bank explaining funding costs and lending rates (see reference). Hope that helps.


    Reference: http://www.rba.gov.au/publications/bulletin/2012/mar/5.html
William A McNab
New Zealand
Specializes in field
Native speaker of: English
PRO pts in category: 8
Grading comment
Thank you - this was very helpful

Peer comments on this answer (and responses from the answerer)
agree  GILOU
12 hrs
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Reference comments


15 mins
Reference: http://cib.natixis.com/flushdoc.aspx?id=46427

Reference information:
From one non-economist to another I found this, which to my untrained eye seems to suggest that it's the rate at which banks lend to one another... No doubt someone with better knowlege will contribute, but this could be a starting point for you.

Colin Morley (X)
France
Native speaker of: English
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2 days 8 hrs
Reference: cost of the resource

Reference information:
http://www.banque-france.fr/fileadmin/user_upload/banque_de_...

Banque de France • Financial Stability Review • No. 3 • November 2003

Cf p58: The doc refers to Basel I and II but it would seem to be standard terminology in context, although not and original EN document.

"The largest component of the cost of credit is the
cost of refinancing: i.e., the cost of the resource
that appears on the liability side of the bank’s
balance sheet. The next largest component is the
cost of the human resources and materials needed
to raise the financing and extend the loan. The
third component is the cost of risk covered by
provisions. The fourth, and smallest in size, is the
regulatory cost of capital."

Nikki Scott-Despaigne
Native speaker of: Native in EnglishEnglish
PRO pts in category: 11
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