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Banking Terms And Definitions Pdf

banking terms and definitions pdf

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The words, expressions, institutions and definitions of the Banking and Finance industry can often seem dense and confusing to an undergraduate, even to one aspiring to the financial world themselves. So, we've brought together a glossary for the most common terms to help you get up to speed.

10 Essential Banking Terms You Need to Know

The words, expressions, institutions and definitions of the Banking and Finance industry can often seem dense and confusing to an undergraduate, even to one aspiring to the financial world themselves. So, we've brought together a glossary for the most common terms to help you get up to speed.

An item of property owned by a person or company regarded as having a value, and which can meet a debt. The central bank for the UK. It acts as the government's bank, issues currency, oversees monetary policy and sets interest rates. Adjective used to describe high quality and specifically in the banking world to describe stocks which are a reliable investment, but less so than gilt-edged stock.

Originates either from a high value poker chip, or from a sliver of diamond. An investment bank which offers some but not all banking services, generally in corporate finance. Assets which are available for a purpose such as investment or starting a company. It is different to money because money is used only to purchase things, capital is used to generate wealth, e.

A payment received. Alternatively, an agreement to repay something of value in the future. Thirdly, the borrowing capacity of a person or company. An assessment of a particular issuer's credit worthiness which results in a rating being assigned. Ratings range from AAA very high to D in default. The strategy of investing broadly across a number of different investments to reduce risk; a hallmark of mutual fund investing. A country which is developing the characteristics of a developed market, but is not yet fully developed.

Normally a country experiencing rapid growth and industrialisation. A document involving monetary value which can be equity based, represent ownership of an asset or represent a loan made to an owner of an asset.

They are tradeable packages of capital. Essentially, it is an equity, asset or loan. Two American institutions involved with mortgages. They were heavily involved in the causes of the credit crunch of as they were over exposed to risk. Its rises and falls are used as a gauge of business prosperity. Short term transactions should be financed with short term money, and long term transactions with long term funds.

Fictional stockbroker from the film Wall Street who has become a byline for greed thanks to his mis quote "greed is good". A bond issued by a national government to finance spending. While this means the bond is free of credit risk because the government can always pay the debt by raising taxes or printing money, it does depend on a stable political system. Investments of a few normally wealthy people pooled together and managed professionally. Their goal is to aggressively maximise return on the investment but the term actually originates from their previous strategy of "hedging risk".

A parent corporation, limited liability company or limited partnership that owns enough voting stock in another company to control its policies and management. This means the holding company is protected against the other company's losses or liabilities, but reaps the rewards of its profits.

It can also be based in jurisdictions with lower tax rates while allowing the other company to continue to operate wherever. Created to promote monetary and exchange stability in the global economy.

This means it monitors financial developments around the world and lends funds to needy countries. An increase in prices which means that the purchasing power of money falls - in other words you get less for your money than you used to.

The first sale of a company's shares to the public, also known as a stock market listing or flotation. Often used as a means for a young company to raise capital to expand. Risky investments which can offer higher yields than safer bonds. Often issued by companies with a low credit rating as investors demand higher rewards as compensation for the risk of investing in them.

Borrowing capital to finance an investment much larger than that which the borrower can afford with their own cash, in order to increase the potential return of the investment. The bigger the ratio of borrowed money to owned, the more leveraged they are. A rate which some leading banks charge each other for short-term loans. It is used to calculate interest rates on loans throughout the world. The measure of how quickly an investment can be turned into cash.

A mutual fund generally is considered a very liquid investment, because shares can be redeemed at any time. In contrast, a house is a very illiquid investment. The finite time period at the end of which the financial instrument stops and the principle is repaid with interest.

A type of financing which combines debt and equity financing. It is debt capital which gives the lender the right to ownership and equity if the loan is not paid. It is often quite high risk so it can also be high yield for the lender. The word is derived from the Latin for "middle" as the risk is medium. A system to allow low-income individuals or groups who cannot access normal financial services to save, lend or insure themselves. Its goal is to make these low-income demographics become self-sufficient.

An agreement for the right to buy or sell a financial asset at an agreed price during a certain time period. If the price of the asset rises, the option buyer can buy it at the agreed lower price and sell for a profit. On the other hand, if the price drops, the option writer can sell at the agreed price which is now higher, making themselves a profit instead.

They are generally very illiquid. The collective noun for financial assets held by investors or managed by financial professionals. A company who has issued securities through an IPO and consequently the value of their company is determined by the markets.

Three months of the financial calender, often used as a basis for reporting performance. Often expressed as Q1 Q2 Q3 and Q4. Essentially the same as an investment but with a much higher risk of losing the initial outlay, though with a potential for a very high return. It sometimes has negative connotations such as irresponsibility. When one company buys another company.

Occasionally a publicly listed company will be acquired in a hostile take over against its will when the buying company suddenly buys all the shares. Government department responsible for formulating and implementing financial and economic policy.

Volatility refers to the amount of fluctuation in price of a security. Generally speaking, the higher the volatility the riskier the investment. A collective noun for the financial commnuity in NY. Jordan Belfort, the subject of a Leonardo diCaprio film, who was a stockbroker convicted of fraud. An international organisation dedicated to aiding developing nations by providing finance, advice and research.

The income return on an investment, usually expressed as a percentage based on the investment's cost. Now you're up to speed with the latest expressions and definitions, use our investment banking graduate scheme application deadline list to find your next step into this industry.

Glossary of Banking terms A-Z The words, expressions, institutions and definitions of the Banking and Finance industry can often seem dense and confusing to an undergraduate, even to one aspiring to the financial world themselves.

Annuity A fixed sum of money paid to someone every year, often as a pension. Asset An item of property owned by a person or company regarded as having a value, and which can meet a debt. Back of House Support personnel in a financial services company. Bail out The giving of financial assistance to a failing business to save it from collapse. Bank of England The central bank for the UK. Blue chip Adjective used to describe high quality and specifically in the banking world to describe stocks which are a reliable investment, but less so than gilt-edged stock.

Bond A loan to a corporate or government for a defined period at a fixed interest rate. Boom and bust A process of economic expansion and contraction, often in repeated cycles. Boutique An investment bank which offers some but not all banking services, generally in corporate finance.

Broker A person who buys and sells stocks for others in return for a commission. Bulge bracket The largest multinational investment banks. Capital Assets which are available for a purpose such as investment or starting a company. Capital market The financial system which raises capital by dealing in shares, bonds and long term investments. Cash flow The amount of money being transferred in and out of a business, affecting liquidity.

Collateral Assets that are offered to secure a loan or type of credit Commodity A raw material that can be bought or sold such as coffee or coal. Credit A payment received. Credit rating An assessment of a particular issuer's credit worthiness which results in a rating being assigned. Debit A payment made.

Default Failure to repay a loan. Diversification The strategy of investing broadly across a number of different investments to reduce risk; a hallmark of mutual fund investing. Domiciled Reside or be based. Duty A tax levied on goods not humans Emerging market A country which is developing the characteristics of a developed market, but is not yet fully developed.

Exposure Being placed at risk of financial losses. Financial Instrument A document involving monetary value which can be equity based, represent ownership of an asset or represent a loan made to an owner of an asset.

Glossary of Banking Terms

Account Options Sign in. Top charts. New releases. Add to Wishlist. Oxford Dictionary of Finance and Banking - the most comprehensive and up-to-date dictionary of finance available. This accessible guide is a perfect source of reference for all those with an interest in finance. Invaluable for students and professionals in the fields of finance and banking, it is also ideal for private investors and readers of the financial pages.

However, since banking is a significant part of our business and personal life, it is useful for consumers to learn some common banking terms. Sign in. Log into your account. Password recovery. Forgot your password? Get help. IBPS Guide.


Certificate of Deposit (CD) – a type of investment that requires you to invest your money for a certain length of time and guarantees the same rate of return.


Glossary of Banking terms A-Z

10 Essential Banking Terms You Need to Know

Understanding basic banking and finance — and the terminology people use to talk about them — can make a big difference in your bank balance. Here are 10 banking terms you should know to manage your money better. A nine-digit number that identifies your financial institution. Larger banks may have multiple routing numbers that are based on the geographic location where the account was opened. The Federal Deposit Insurance Corp.

Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance.

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The contract governing your open-end credit account, it provides information on changes that may occur to the account. The payment history of an account over a specific period of time, including the number of times the account was past due or over limit. Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank.

ABS expresses principal prepayments as a percentage of the original number of loans or contracts in the pool of securitized loans that created the security. ABS is always expressed as a monthly rate. Absorption A term used by real estate lenders and developers to describe the process of renting up newly built or renovated office space or apartments. The term "absorption period" is often used to describe the period of time necessary for absorption.

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    08.06.2021 at 08:37
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