Okuzeka
Finance & Banking vocabulary · Risk Management

Asset encumbrance

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, asset encumbrance means: The condition of assets being pledged or otherwise restricted from freely meeting additional funding needs.

In Turkish: varlıkların teminata bağlanması

How it is used

Use in funding analysis; distinguish total assets from assets still freely available.

Example sentences

  1. New secured borrowing increased the bank's asset encumbrance.

    Pledging assets reduces the pool available for other funding.

  2. The report explained asset encumbrance arising from the covered bond programme.

    Designated collateral cannot be treated as wholly unrestricted liquidity.

Common collocations

  • asset encumbrance ratio
  • monitor asset encumbrance
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.
  • liquidityHow easily an asset can be turned into cash without losing value, or how much cash and easily sold assets a bank or company has to meet its payments.

More terms: Risk Management

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This page explains English vocabulary for learners. It is not financial advice.