Source of wealth
What is source of wealth, and how is it different from source of funds?
ONE OF 366 TERMS · FREE · NO SIGNUP
BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
Source of wealth is how a customer came to have their overall wealth, such as a career, a business sold or an inheritance; source of funds is where the money in a particular transaction or deposit came from. Banks establish one or both, as the risk requires, under enhanced due diligence, which anti-money-laundering rules in the UK, Australia and New Zealand expect for higher-risk customers, including politically exposed persons. A US$3 million deposit from selling a business has a clear source of funds in the sale agreement, but the bank still asks whether the customer's total wealth fits the history they describe.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// WORKED IN
// NEXT TO IT
// SUBSCRIBE
The Lab.
One case file and one question, in your inbox every Tuesday morning, New Zealand time. The senior banker's read opens only after you answer.
FREE WITH IT · THREE PDFS
An interview case, an annotated credit paper, and a one-page loan application sheet.
No spam. Unsubscribe anytime. Educational content only.