Banking/Related Articles

Index

See the economics index for an index to topics referred to in the economics articles.

Glossary

See the economics glossary for definitions not shown on this page

• Asset price bubbles [r]: The condition of an asset market in which price is governed by speculators' expectations that it will increase. ^[e]
• "Bad bank" [r]: A subsidiary, or separate corporation, created to hold and manage non-performing assets transferred to it by a rescued bank. ^[e]
•   Banking panic - see Panic (banking)
• Basel I [r]: A set of recommendations published in 1988 by the Basel Committee on Bank Supervision that were intended to ensure that banks have enough capital to cope with the risks that they may be expected to encounter. ^[e]
• Basel II [r]: A replacement for Basel I published in 2004 by the Basel Committee on Bank Supervision that requires banks to identify the risks they may be expected to encounter and to improve their ability to manage them. ^[e]
• Bill of Exchange [r]: A written order to pay the holder a stated sum of money at a stated date (otherwise known as a "draft", the person who is paid being termed the "drawer"). ^[e]
• Bubble (economics) [r]: A surge in prices that raises expectations of further increases, so generating further increases: a process that continues until confidence falters, the bubble "bursts" and prices rapidly revert to an objectively-based level. ^[e]
• Capital adequacy ratio [r]: The ratio of a bank's capital to its risk weighted credit exposures. May be defined in terms of tier 1 (core) or tier 2 capital. ^[e]
• Central Bank [r]: A government agency that is responsible for monetary policy and the support of the banking system (for example the Federal Reserve Board and the Bank of England). Usually responsible for controlling a country's monetary policy and preserving the value of its currency. ^[e]
• Commercial paper [r]: unsecured debt_instruments that are issued by corporations to meet short term financing needs (usually repayable after 3 months). ^[e]
• Contagion (banking) [r]: the spread of a run, loss or insolvency from one bank to another, or the spread of a banking crisis from one country to another. ^[e]
• Contingent convertible bond [r]: A bond that converts automatically into shares in a stipulated contingency (for a bank the stipulated contingency is normally that its reserve ratio falls below a stipulated level). Often called a "coco": also known as an "enhanced capital note". ^[e]
• Credit easing [r]: A method of making credit more available to individuals and businesses by changing the composition of the assets of the central bank towards less liquid and riskier private sector assets. Unlike quantitative easing, it may be done without expanding the money supply. ^[e]
• Credit risk [r]: The risk that the value of a loan-based security will fall as a result of defaults on the part of borrowers (as distinct from interest rate risks and exchange rate risks). ^[e]
• Debt_instrument [r]: A formal obligation assumed by a borrower to replay the lender in accordance with the terms of an agreement, including bonds, debentures, promissory notes, leases and mortgages. ^[e]
• Deposit insurance [r]: An arrangement under which depositors in a bank that becomes unable to meet demands for withdrawals, are compensated to the extent of a substantial proportion of the amount of their deposits. ^[e]
• Derivative [r]: An asset whose value depends upon the expected value of another asset. ^[e]
• Discounting [r]: (i) The action of selling a bill of exchange before its due payment (or "maturity") date "at a discount": that is to say after paying the purchaser a fee for accepting it. (ii) The practice of calculating the current equivalent of a future cost or benefit by the application of a chosen discount rate. ^[e]
• Discount_rate [r]: (i) The percentage by which current value exceeds value in a year's time. (ii) The rate at which banks may borrow at their central bank's discount window. ^[e]
• Discount window [r]: A facility provided by central banks that enables a bank to make secured short-term loans at its central bank's discount rate. ^[e]
• Draft (finance) [r]: Another name for a bill of exchange (termed "bank draft" if issued by a bank: otherwise "trade draft"). ^[e]
• Enhanced capital note [r]: A bond issued by a bank that converts automatically into that bank's shares if its reserve ratio falls below a stipulated level (also known as a "contingent convertible bond"}. ^[e]
• Fair value [r]: An accounting convention under which the balance sheet valuation of an asset is an estimate of a price that would be fair to both a seller and a buyer of that asset, taking account of the advantages of the transaction to each (replacing the "historical" convention under which assets were valued at the price at which they had been acquired). ^[e]
• Federal funds rate [r]: The overnight interest rate at which banks lend balances at the Federal Reserve to other banks. ^[e]
• Federal Deposit Insurance Corporation [r]: Independent agency created by the United States Congress with a remit to maintain stability and public confidence in the financial system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, and managing receiverships. ^[e]
• Fiat money [r]: money whose value is determined solely by government order, or "fiat" (as distinct from commodity money that has value because of its scarcity or cost of production). ^[e]
• Fractional-reserve banking [r]: Add brief definition or description
• Great moderation [r]: Add brief definition or description
• Interbank market [r]: Add brief definition or description
• Interest rate risk [r]: Add brief definition or description
• Leverage [r]: Add brief definition or description
• Leverage ratio [r]: Add brief definition or description
• LIBOR [r]: Add brief definition or description
• Liquidity [r]: Add brief definition or description
• Liquidity risk [r]: Add brief definition or description
• Liquidity trap [r]: Add brief definition or description
• Macroprudential financial policy [r]: Add brief definition or description
• Margin account [r]: Add brief definition or description
• Margin call [r]: Add brief definition or description
• Market risk [r]: Add brief definition or description
• Monetary base [r]: Add brief definition or description
• Monetary policy [r]: Add brief definition or description
• Money market [r]: Add brief definition or description
• Moral hazard [r]: Add brief definition or description
• Open market operation [r]: Add brief definition or description
• Originate and distribute [r]: Add brief definition or description
• Panic (banking) [r]: Add brief definition or description
• Prime rate [r]: Add brief definition or description
• Qualitative easing [r]: Add brief definition or description
• Quantitative easing [r]: Add brief definition or description
• Reserves (banking) [r]: Add brief definition or description
• Reserve ratio [r]: Add brief definition or description
• Run (banking) [r]: Add brief definition or description
• Securitisation [r]: Add brief definition or description
• Sterilisation, monetary [r]: Add brief definition or description
• Stress test (banking) [r]: Add brief definition or description
• Structured investment vehicle [r]: Add brief definition or description
• Tier 1 capital [r]: Add brief definition or description
• Tier 2 capital [r]: Add brief definition or description
• Value at risk [r]: Add brief definition or description
• Wholesale banking [r]: Add brief definition or description