Capital Flow Watch

The term ‘funding corporation’ is used by the Federal Reserve Bank for certain operations in its flow of funds accounts.

The funding corporation sector comprises four types of financial institutions and entities:

Subsidiaries of foreign banks that raise funds in the US capital markets and transfer the proceeds to foreign banking offices in the US;

Subsidiaries of foreign bank and nonbank financial firms that raise funds in the US and transfer them to the parent company abroad;

Nonbank financial holding companies; and

Custodial accounts for reinvested collateral associated with securities-lending operations.

(Source: Federal Reserve Bank Explanation of Flow of Funds Accounts)