loan-deposit ratio


The amount of a bank's loans divided by the amount of its deposits at any given time. The higher the ratio, the more the bank is relying on borrowed funds, which are generally more costly than most types of deposits.

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I wanted to know what the loan-deposit ratio was and I decided to consult my friend, who knew a lot about it.

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To say the loan-deposit ratio was through the roof would have been to understate the bank's problems; customers were jumping ship, taking their accounts elsewhere, and now it seemed their only business was in lending money they wouldn't even have if this trend kept up.

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LOAN-DEPOSIT RATIO A ratio that is used in determining the amount of loans that a bank has out versus the amount of current deposits on hand at that same time. This ratio is determined by dividing the bank's loan amounts by its total amount of deposits.

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