July 2023 - Page 17 of 823 - Dr. Gerhard Merk

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, expenses incurred in installing/dismantling and transporting an item. – In banking, such expenses are incurred primarily when bank containers are set up at major events such as festivals, church conventions, sporting events, concerts, fairs and trade shows. For local institutes in particular, however, such an on-site presence is generally required. At the… read more »

Generally, the conversion of non-marketable assets of any kind into tradable securities (the process of converting nontradable assets into tradable securities.). – Banks bundle receivables from loans extended into debt securities that are sold to investors. – Banks issue certificates for foreign shares not listed on the domestic stock exchange, thereby making them tradable on… read more »

In the case of a bank, the possibility of at least partially offsetting losses from non-performing loans (bad-debt losses) against tax liabilities. – The tax law provisions on this vary from country to country, but are restrictive overall. It is assumed that banks will be more lax in granting loans if it is clear from… read more »

According to IAS 39, a credit balance in the income statement or a surplus of liabilities over assets in the balance sheet only had to be recognized when the loss actually occurred, i.e., when it materialized. The event triggering the loss (trigger event) could be waited for. In the course of the financial crisis that… read more »

Term used primarily in connection with certain tradable financial instruments. Banks bundle a large number of issued loans into a portfolio. This is then broken down into individual tranches; usually into three, not necessarily equal parts. – The lowest, relatively high-interest tranche (first-loss piece, also known as equity tranche) must fully bear (absorb) the loss… read more »

Loan to a company with the purpose of enabling the company to transfer – product lines, – entire divisions or – subsidiaries to a contractual partner (capital provided to a company to facilitate the sale of its interest in a product, division or subsidiary to another business entity). – Such financing is particularly important if… read more »

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 »

In the financial sense, the withdrawal of money from a cash register for payment purposes; correspondingly, it is referred to as collection. – The expression was already in the 19, Jht. as Unwort (misnomer: a mistaken or unsuitable term) reprimanded. However, it has been used to some extent up to the present day in addition… read more »