Wu Xing
Can you help me on the following sentences? I learned every words before but I don't understand.

"The bank may at its sole dicretion determine from time to time the elemnts to be included in the Base Rate. The Bank may include without limitation and without any obligation to give an account of the differetn components, the actual or alternative costs of refinancing, internal costs relating to liquidity and funding arrangements, costs arising from regulatory capital requiremnt and the other inter costs and provisions."


The content is from a Credit Service Notfication Letter from the bank.


Nov 27, 2015 3:19 AM
Comments · 9

Base rate is an interest rate.  For consumer credit this is typically attached to what we call a margin rate.  Combine them together and you get an interest rate.  The way it's calculated depends on where you're located geographically, but it's typically expressed in an annual percentage and calculated on a daily or monthly basis.


The part about costs of refinancing is strange to me, but I've only worked in finance in the US and this provision feels more European or possibly Asia/Pacific to me.


Liquidity and funding arrangements would be the bank incurring costs to maintain its capital reserve requirement.  Banks are required to keep certain minimum amounts on reserve and may borrow from other places in the short term to meet these requirements.  There is an interest rate charged for this and this cost can be passed down to the consumer at their discretion.


The part about costs from regulatory requirements echoes this.  This is standard practice but since banking is heavily regulated, it's required for them to present this notification to you or to the company you work with.  The local gas station can do all of the above but they don't need to notify every customer at the gas pump.  Also, the gas station does not have to disclose to you the components of their charges apart from taxes.

November 27, 2015

@Phil @Jackie @Michael Chambers @Peachey @Nico Thank you all so much. Thanks for your kindness and help on the sentences. Your paraphrases and explanation is very clear and I have understood the sentence except several words used in bank and finance. It's OK, I can look it up in specialized dictionary.


It's the first discussion I posted and I had thought no one would answer me. But thank you, I got your answers here. It is rather encouraging.^_^

November 30, 2015


I think (from the banker's point of veiw) that they need to tell her everything what it will be charged or have been charged but they dont need approval from her to do that.

@Wu Xing

That part of letter is usual and you dont need worry about it.

November 27, 2015

Maybe if I break it up for you, it'll be clearer:


<em>"The bank may [at its sole discretion] determine [from time to time] the elements to be included in the Base Rate."</em>

Which is pretty much what Phil has said: they can charge whatever they want.


<em>"The Bank may include [without limitation and without any obligation to give an account of the different components]:</em>

<em>- the actual or alternative costs of refinancing</em>

<em>- internal costs relating to liquidity and funding arrangements</em>

<em>- costs arising from regulatory capital requirements, and</em>

<em>- the other internal costs and provisions."</em>

So they can add these, but they don't have to tell you. Not so nice, is it?

November 27, 2015

From the point of view of learning English, don't worry if you don't understand this kind of paragraph. It might appear in an advanced legal English course, but not a general English course.  Most native speakers would find it hard to make sense of it accurately.

November 27, 2015
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