The process of banks borrowing from other banks and other investors to finance their asset purchases is known as:

Question

Quizplus · Accepted Answer

The process described here is known as wholesale funding, where banks borrow from other banks and institutional investors in large amounts to finance their operations and asset purchases. Choice A, credit funding, is not a commonly used term, and may refer to a specific type of funding where banks provide credit or loans to other banks. Choice B, market funding, is a broad term that refers to the various ways banks and other institutions raise funds from markets, including bonds, equities, and derivatives. Choice C, retailing funding, does not accurately describe the process described here because it refers to retail banks (i.e., those serving individual customers) raising funds from retail investors. Finally, choice D, debt funding, is a general term that refers to different forms of borrowing and raising funds, which may or may not involve other banks or institutional investors.

The Process of Banks Borrowing from Other Banks and Other