7.2.3 Computing Required Amount of Core Funding

The required core funding factor is a pre-determined weight ranging from 0% to 100% which is applied through business assumptions for the accounts falling under the defined dimensional combinations. The weights are guided by the CFR standard. The required core funding is then considered as a sum of all the weighted amounts where an RCF factor is applied.

The required core funding factor is a weight function and is applied similarly to that of the ACF. The formula, which is used for calculating the Required Amount of Core Funding, is as follows:

Figure 6-3 Required Amount of Core Funding