|
Structured Investment Vehicle
A structured investment vehicle (SIV) is a non-bank financial institution established to earn a credit spread between the longer-term assets held in its portfolio and the shorter-term liabilities it issues. They are simple credit spread lenders, frequently "lending" by investing in securitizations, but also by investing in corporate bonds and funding by issuing commercial paper and medium term notes, which were usually rated AAA until the 2008 financial crisis. They did not expose themselves to either interest rate or currency risk and typically held asset to maturity. SIVs differ from asset-backed securities and collateralized debt obligations in that they are permanently capitalized and have an active management team. They are generally established as offshore companies and so avoid paying tax and escape the regulation that banks and finance companies are normally subject to. In addition, until changes in regulations around 2008, they could often be kept off the balance- ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Non-bank Financial Institution
A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that is not legally a bank; it does not have a full banking license or is not supervised by a national or international banking regulatory agency. NBFC facilitate bank-related financial services, such as investment, risk pooling, contractual savings, and market brokering. Examples of these include hedge funds, insurance firms, pawn shops, cashier's check issuers, check cashing locations, payday lending, currency exchanges, and microloan organizations. In 1999, Alan Greenspan identified the role of NBFIs in strengthening an economy, as they provide "multiple alternatives to transform an economy's savings into capital investment which act as backup facilities should the primary form of intermediation fail." Operations of non-bank financial institutions are not typically covered under a country's banking regulations. Etymology The term ''non-bank'' likely started as ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bond (finance)
In finance, a bond is a type of Security (finance), security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the Maturity (finance), maturity date and interest (called the coupon (bond), coupon) over a specified amount of time.) The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and Share capital, stocks are both Security (finance), securities, but the major difference between the two is that (capital) stockholders h ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Disruption
Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market *Marketing, the act of satisfying and retaining customers Market(s) or The Market(s) may also refer to: Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films * ''Market'' (1965 film), 1965 South Korean film * ''Market'' (2003 film), 2003 Hindi film *'' The Market: A Tale of Trade'', a Turkish film Television * ''The Market'' (TV series), a New Zealand television drama * "Markets" (''Bluey''), an episode of the first season of the animated TV series ''Bluey'' Brands or enterprises * The Market (company), a concept grocery store *The Market, a specialized Safeway store Types of economic markets *Agricultural marketing *Emerging market *Energy market *Financial market *Foreign exchange market *Grey market, commodity trad ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pari Passu
''Pari passu'' is a Latin phrase that literally means "with an equal step" or "on equal footing". It is sometimes translated as "ranking equally", "hand-in-hand", "with equal force", or "moving together", and by extension, "fairly", "without partiality". Etymology *'' pari'' is the ablative singular masculine (since it must grammatically agree with ''passu'') of the adjective ''par'', "equal". If it were nominative, "an equal step" it would be ''par passus''. *'' passu'' is the ablative of the Latin noun ''passus'', "step". In legal terms, pari passu means "on equal footing." It refers to creditors, claimants, or shareholders receiving equal treatment without preference. Common in bankruptcy and finance, it ensures proportional distribution of assets, rights, or obligations among parties. This term is commonly used in law. '' Black's Law Dictionary'' (8th ed., 2004) defines ''pari passu'' as "proportionally; at an equal pace; without preference". Usage In inheritance In inh ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tranche
In structured finance, a tranche () is one of a number of related securities offered as part of the same transaction. In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation (see indenture) usually defines the tranches as different "classes" of notes, each identified by letter (e.g., the Class A, Class B, Class C securities) with different bond credit ratings. Etymology The word '' tranche'' means ''a division or portion of a pool or whole'' and is derived from the French for 'slice', 'section', 'series', or 'portion', and is also a cognate of the English 'trench' ('ditch'). The term ''tranche'' is used in fields of finance other than structured finance (such as in straight lending, where ''multi-tranche loans'' are commonplace), but the term's use in structured finance may be singled out as particularly important. Use of "tranche" as a verb is limited almost exclusively to this field. Process All the tranches ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Leverage (finance)
In finance, leverage, also known as gearing, is any technique involving borrowing funds to buy an investment. Financial leverage is named after a lever in physics, which amplifies a small input force into a greater output force. Financial leverage uses borrowed money to augment the available capital, thus increasing the funds available for (perhaps risky) investment. If successful this may generate large amounts of profit. However, if unsuccessful, there is a risk of not being able to pay back the borrowed money. Normally, a lender will set a limit on how much risk it is prepared to take, and will set a limit on how much leverage it will permit. It would often require the acquired asset to be provided as collateral security for the loan. Leverage can arise in a number of situations. Securities like options and futures are effectively leveraged bets between parties where the principal is implicitly borrowed and lent at interest rates of very short treasury bills.Mock, E. J., R. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Liability (financial Accounting)
In financial accounting, a liability is a quantity of value that a financial entity owes. More technically, it is value that an entity is expected to deliver in the future to satisfy a present obligation arising from past events. The value delivered to settle a liability may be in the form of assets transferred or services performed. Characteristics A liability is defined by the following characteristics: * Any type of borrowing from persons or banks for improving a business or personal income that is payable during short or long time; * A duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services, or other transaction yielding an economic benefit, at a specified or determinable date, on occurrence of a specified event, or on demand; * A duty or responsibility that obligates the entity to another, leaving it little or no discretion to avoid settlement; and, * A transaction or event obligating the entity that has already occ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment Management
Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contract, contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or REIT, Real estate investment trusts. The term ''investment management'' is often used to refer to the management of investment funds, most often specializing in private equity, private and public equity, real assets, alternative assets, and/or bonds. The more generic term ''asset management'' may refer to management of assets not necessarily primarily held for investment purpos ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Capital Note
{{Unreferenced, date=June 2019, bot=noref (GreenC bot) Capital notes are several types of securities. "Capital note" has a number of meanings, as it can be either an equity security, a debt security or a form of security used in structured finance. In all cases, the use of the term "capital" is to denote that the security is relatively junior in the issuing corporation's order of priorities in claims for its assets. Convertibles Capital notes are a form of convertible security exercisable into shares. They are equity vehicles. Capital notes are similar to warrants, except that they often do not have an expiration date or an exercise price (hence, the entire consideration the company expects to receive, for its future issue of shares, is paid when the capital note is issued). Capital notes may be issued in connection with a debt-for-equity swap restructuring: instead of promptly issuing the debt-replacing shares, the company issues convertible securities, in order to postpone ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
LIBOR
The London Inter-Bank Offered Rate (Libor ) was an interest rate average calculated from estimates submitted by the leading Bank, banks in London. Each bank estimated what it would be charged were it to borrow from other banks. It was the primary benchmark, along with the Euribor, for short-term interest rates around the world. Libor was phased out at the end of 2021, with market participants encouraged to transition to risk-free interest rates such as SOFR and SARON. LIBOR was discontinued in the summer of 2023. The last rates were published on 30 June 2023 before 12:00 pm UK time. The 1 month, 3 month, 6 month, and 12 month Secured Overnight Financing Rate (SOFR) is its replacement. In July 2023, the International Organization of Securities Commissions (IOSCO) said four unnamed United States dollar, dollar-denominated alternatives to LIBOR, known as "credit-sensitive rates", had "varying degrees of vulnerability" that might appear during times of market stress. Libor rates w ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Basel I
Basel I is the first Basel Accord. It arose from deliberations by central bankers from major countries during the late 1970s and 1980s. In 1988, the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, published a set of minimum capital requirements for banks. It is also known as the 1988 Basel Accord, and was enforced by law in the Group of Ten (G-10) countries in 1992. Background The Committee was formed in response to the messy liquidation of Cologne-based Herstatt Bank in 1974. On 26 June 1974 a number of banks had released Deutschmarks (the German currency) to the Herstatt Bank in exchange for dollar payments deliverable in New York City. Due to differences in the time zones, there was a lag in the dollar payment to the counterparty banks; during this lag period, before the dollar payments could be effected in New York, the Herstatt Bank was liquidated by German regulators. This incident prompted the G-10 nations to form the Basel Committee on Ban ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
