John R. Edman, G.M.A.C.'s chairman, said the lower annual profit resulted from narrower margins between the gross earning rates on outstanding loans and the cost of borrowed funds.
"Easy money" policies on the part of the central bank, whereby the cost of borrowed funds and their availability are indirectly regulated in such a way as to encourage business borrowing, may lead to higher levels of real investment.
But, even with continuing loan demand, he said, the reduction in the prime rate, plus the fact that the cost of borrowed funds in the open market had re mained at a high level, had com bined to put a severe crimp in the rate of growth in bank earnings in the second quarter.
With 60 1 leverage and a near-zero cost of borrowed funds, we don't need high yields on the asset side.
Other factors to consider: the annual percentage rate (the annual cost of borrowed funds, with all fees and interest included); the maximum credit limit you can qualify for; repayment terms; type of interest rate (fixed or variable, meaning your rate and payments can change based on the market); and whether collateral is required.
Ray Boulger of mortgage broker John Charcol said: "I suspect it has been withdrawn because the cost of borrowing funds in the wholesale markets has gone up a bit in the past week or so".
The cost of carbon credits from a forest plantation is a function of land price, establishment and maintenance costs, the cost of borrowing funds for establishment, transaction costs associated with trading carbon credits for forestry acts, revenues from other products and carbon accumulation rates.
Mr Goodman, known as "Lord Libor", insisted that he never expected banks, which every day sent their estimated costs of borrowing funds in a variety of currencies to the administrator of the Libor rate, to match his predictions.
The interbank cost of borrowing funds eased, keeping in step with a gradual decline in the rate of borrowing between banks.
Buyers in some parts of the country have benefited from rising house prices and rents, and low interest rates have made the cost of borrowing to fund a purchase cheaper than ever.
It is understood that Ofwat believes the cost of borrowing to fund projects will also be lower for these companies.
