| 释义 |
compensating balance
Thesaurus| Noun | 1. | compensating balance - a minimum credit balance that a bank may require a borrower to keep on deposit as a condition for granting a loan; a common requirement for establishing a line of credit at a bank; "the compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged"offsetting balancebalance - the difference between the totals of the credit and debit sides of an account |
Translationscompensating balance
Compensating balanceAn excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.Compensating BalanceMoney from a loan that a borrower keeps in an account with a lender providing some surety that the lender will be repaid. A compensating balance is especially common with corporate loans. It increases the cost of capital to the borrower because he/she is paying interest on more money than he/she is permitted to use.compensating balance The funds that a corporate borrower is required to keep on deposit in a financial institution in order to satisfy the terms of a loan agreement. The deposit may be in a checking account, savings account, or certificate of deposit, depending on the nature of the agreement. The net effect of a compensating balance requirement is an increase in the effective cost of the loan because the borrower is unable to use all the funds on which interest is paid.compensating balance
Related to compensating balance: interestSynonyms for compensating balancenoun a minimum credit balance that a bank may require a borrower to keep on deposit as a condition for granting a loanSynonymsRelated Words |