The Sources and Uses of Funds for Financial Intermediaries: The Case of a Nigerian Bank

20 Pages Posted: 31 Jan 2017

See all articles by Oluseun Paseda

Oluseun Paseda

University of Lagos - Faculty of Business Administration

Date Written: February 1, 2013

Abstract

This paper analyses the sources and uses of funds of a financial intermediary: banks. A bank’s sources and uses of funds are embodied in its statement of financial position. The sources of funds are primarily deposits, borrowed capital and shareholders’ funds while the primary uses are loans and investments, defensive assets and required reserves. A bank’s health is measured by CAMELS. Specifically, Capital serves as buffer against losses, deposits are the primary source of liquidity while the quality of assets is enhanced when provisioning on possible losses do not crystallize. A tractable model of the banking firm is a prerequisite to economy-wide analysis of financial and monetary systems that rely heavily on intermediation and inside money.

Keywords: Sources and uses of funds, reserve regulations, bank capital, bank liquidity

JEL Classification: G20, G21, G28.

Suggested Citation

Paseda, Oluseun, The Sources and Uses of Funds for Financial Intermediaries: The Case of a Nigerian Bank (February 1, 2013). Available at SSRN: https://ssrn.com/abstract=2908306 or http://dx.doi.org/10.2139/ssrn.2908306

Oluseun Paseda (Contact Author)

University of Lagos - Faculty of Business Administration ( email )

Akoka
Yaba
Lagos, 1234
Nigeria
+234 8034676242 (Phone)

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