July 2023 - Page 13 of 823 - Dr. Gerhard Merk

The ability of an economic entity in general, and a bank in particular, to absorb losses without jeopardizing its own existence. The concept of the ability to absorb losses in the banking industry is not easy to outline. The key idea governing this notion is that appropriate instruments must not only allow their issuer to… read more »

In general, any type of transaction aimed at avoiding a possible trading loss altogether or at keeping it within manageable limits. – In the case of options, the taking of a short position in the futures market for the purpose of hedging a long position in the cash market. – See replacement sale, hedging. Attention:… read more »

In the case of a life insurance policy, the automatic lapse under the terms of the policy if the policy owner falls behind with the premium (the termination of an insurance policy because of the owner of the policy failing to pay the premium within the grace period [commonly within 30 days after the last… read more »

Principle in accounting and regulatory law according to which the same facts must be treated in the same way by all companies in order to be able to compare and assess transactions at different companies. – See mark-to-model approach. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes… read more »

In general, the product of the probability of default and the amount of loss in the event of default. Banks are required by regulatory law to absorb corresponding losses with equity capital. – See Imparity principle. – Cf. BaFin Annual Report 2003, p. 37 f. Attention: The financial encyclopedia is protected by copyright and may… read more »

Any loss not precisely specified in its extent, a damaging decrease, in extreme cases even a total loss, such as of the purchasing power of money or of the confidence of customers in a bank. – Any kind of reduction of the assets of an economic entity (the sum an entity loses on balance). –… read more »

Unless otherwise defined, the purposeful exploration of opportunities to earn money (looking for a way to earn money). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

An account set up for a specific purpose and funded by regular deposits (savings account offered by a financial institution to investors looking to save for particular purpose). This also includes – which the name does not initially suggest – an account set up by an individual for this purpose, e.g. to cover expenses during… read more »

The increase in the number of residents over the age of 65 in an area. This has a variety of implications for investment, government spending, and also for the stability of the currency. – See old-age dependency ratio, Methuselah syndrome, stagnation, secular, aging. Attention: The financial encyclopedia is protected by copyright and may only be… read more »

Under IFRS 9, the probability of occurrence of risks of all types must be recognized over the entire term. The new rule applies not only to banks, but also to impairments of any financial instruments carried at cost, regardless of the industry. This forces the prompt recognition of risk provisions, because the expected cash flow… read more »