banking

Definition of the unofficial banking term “non-cash institution”: a bank whose customers cannot withdraw cash from their accounts under German law.

A sweep account combines an interest-bearing investment account with a transaction account to manage cash flow and improve returns.

Sub-optimal liquidity describes a solvent company or bank lacking sufficient cash to seize market opportunities or make worthwhile investments.

Learn how tax-deductible bad-debt losses affect banks, lending incentives, moral hazard, and the international location of risky loans.

Learn what value sourcing means: reducing costs through favorable procurement, including advantageous purchases of securities and precious metals for resale.

Learn what an overdraft fee is, why banks charge it, and how exceeding an agreed credit limit may affect loan interest rates.

An overdraft occurs when a bank customer withdraws more money than has been deposited. Learn how banks may accept overdrafts by prior arrangement.

Learn what an underwriter is in finance and insurance, including underwriting securities, loans, securitization, and assessing risk.

Definition of the shared pain approach: how creditors and banks share losses after a major debtor’s insolvency, including bail-in principles.

Definition of related banks, including savings banks, Volksbanken and Raiffeisenbanken, with references to local banks and credit cooperatives.

Unexpected loss is generally the product of the probability of default and the loss amount in default. Banks absorb such losses with equity capital.

Definition of loss-absorbing capacity: how banks absorb losses without insolvency and support recapitalization through appropriate financial instruments.

A coupon book is a record of loan repayments or savings deposits, now often electronic, used to reconcile a debtor’s account balance.

A fiduciary account is held by a guardian or bank on behalf of another party, sometimes using foreign deposits to avoid domestic withholding tax.