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What is marginal cost funding means?

Answer:

Marginal Cost funding is the difference in balances when changing a funding rate. An example would be:

A. I have 1 Million dollars at 3% and want to change my funding rate to 2%. When I do this I should expect some rate sensitive money to leave due to the lower rate. Let's say that 50% of the money leaves and now there is 500k at 2%. The marginal cost is the difference between these two options. It could be an added cost or as in this example a marginal effect that is a cost savings, but also a lost funding balance of 500k.

First answer by ID1121857624. Last edit by ID1121857624. Question popularity: 1 [recommend question].

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Relevant answers:

What does marginal costs mean?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit
How do you Have Marginal cost?
Marginal cost comes from the costs of producing just one more of something.
What is marginal cost?
Marginal cost is the change in total cost incurred by adding 1 more unit of output to production.
Find the cost function from marginal cost?
Marginal cost function is a derivative of the cost function. To get the cost function, you need to do the opposite, that is, integrate.
What are funding costs?
Funding Costs: These costs are charges which any company pay to the lender for taking the loan for it's business and workings. For Example interest on loan etc