English

Abbreviation for business-to-business. This refers to payment transactions between companies, including banks. – See Enabler. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!…

Abbreviation for business-to-consumer. This refers to payments (mainly in the form of wages and salaries) made by companies to private households, Attention: The financial encyclopedia is protected by copyright and may only be used…

Abbreviation for business-to-government. This refers to payments made by companies to the state, essentially in fulfillment of tax obligations. Attention: The financial encyclopedia is protected by copyright and may only be used for private…

Generally, low-denomination bonds (in the U.S., under $100). – Popular name for the premium Treasury notes first issued in Germany in 1951. – See Postkreditbrief, PrämienSchatzanweisung, Sparprämienanleihe, Stücke, kleine. Attention: The financial encyclopedia is…

A claim for payment arising from supplies or services provided in a previous accounting period (to charge a person or a firm an amount of money in order to make corrections for previous transactions).…

background area): Divisions of a financial institution that perform work out of sight of customers; this includes all written confirmation and settlement of business dealings, record keeping, accounting and regulatory compliance, including the processing…

A company in one currency area grants a loan to a company in another currency area in its, i.e. the lender’s, currency, assumed to be CHF. In return, the lending company receives a corresponding…

Unless otherwise defined, a transaction between three or more counterparties whereby a security is purchased on a specified date and the buyer resells the security to a third party with the seller’s consent (one…

Especially in the English version in financial language – a transaction that takes place in the same way in the next deal that has already been agreed and is usually of the same type…

In connection with the subprime crisis in 2007, a demand arose that banks must include the special purpose entities they have established in their balance sheets, together with the necessary valuation allowances. – Until…

In relation to the stock exchange, a confirmed credit line that can be drawn in the event of insufficient market liquidity of a financial instrument. It thus ensures liquidity at all times in the…

company-specific global analysis): In relation to the financial market – first of all, the most accurate possible forecast of the future (worldwide) market situation; – in a second step, one goes back to today…

A transaction on the financial market is not based on the date of conclusion of the contract, but on an earlier date. This is done for various reasons, often for the purpose of tax…

In the financial sector, from one’s own actions, prompted by exceptional market activities (remarkable market activities) of the competition, such as especially measures of advertising and introduction of innovative products. Attention: The financial encyclopedia…

Someone buys more options than he sells corresponding contracts because he has corresponding expectations with regard to the underlying asset (a position where someone buys more options relative to the number of sold options;…

A precisely defined backstop arrangement Agreement on how to act in the event of an insolvent bank. The term emerged in 2013 in connection with the question of which of the European institutions should…

The process of testing an investment strategy by using the series of past historical data. Quite a few analysts and business journalists recklessly use backtesting to predict future performance (but there is much evidence…

In relation to the financial market, a special market situation in stock exchange trading in which rising earnings of a stock corporation are associated with falling share prices. The reason for a backup is…

In banks and insurance companies, a central server that automatically stores every file saved on a single computer. Lost or accidentally deleted files can then be retrieved from this directory. By appropriately designing this…

In banks and insurance companies, a central server that automatically stores every file saved on a single computer. Lost or accidentally deleted files can then be retrieved from this directory. By appropriately designing this…

The futures price of a commodity on the commodity futures market is below the spot price; the opposite (i.e., the spot price is above the futures price) is called contango. Backwardation is unfrequent for…

A public hive-off vehicle (state-run rescue company) for bad loans and toxic securities that has been proposed in various cases, especially in Japan and Sweden. This company could bundle the receivables of distressed institutions,…

Regulations adopted in Germany in 2009 following the Financial Market Stabilization Act (FMStG), which came into force in October 2008, to eliminate remaining uncertainties for the financial system and the real economy. This is…

Any bad bank consideration faces two opposing circumstances. – On the one hand, banks’ balance sheets are to be relieved of securities for which – at least temporarily – there is no functioning market,…

Said on the stock exchange in reference to investors whose expectations regarding an acquired asset do not materialize. – Misadvice. Attention: The financial encyclopedia is protected by copyright and may only be used for…

Especially in older documents, often referring to a receivable which is unlikely to be repaid due to the borrower’s low creditworthiness, and which generally has already fallen into arrears. – See default, receivable, outstanding,…

The disadvantageous effect, restricting business transactions, which emanates above all from – a company name, such as: Bankhaus Stehle, – a product name, such as: Ausfallzertifikat, – a country of origin; in the broad…

Official abbreviation for Bundesanstalt für Finanzdienstleistungsaufsicht. 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.…

As the German supervisory authority, the Federal Financial Supervisory Authority (BaFin) is financed entirely from its own revenues. More than three quarters of this revenue is made up of levy payments from the supervised…

Terms invaded into financial language from Japanese for a marketable security in which both the bid price and the ask price are quoted (two-sided market in which the bid price and the ask price…

The deposit of a sum of money or the tendering of other security – such as the delivery of securities or the guarantee of a bank – in order to ensure the satisfaction of…

A sum of money deposited as security, deposit. – In earlier times also a writing fee (Schreibpfennig, Schreibschilling), which had to be paid in cash when contracts were notarized. – See certification fee, collation…

The lenders of a company in general and of an institution in particular share any losses. – In the event of sovereign default, the creditors assume the (foreign) debts of the insolvent country according…

Generally, rescue by way of debt relief by third parties (a situation where a bankrupt or nearly bankrupt entity, such as a corporation or a bank, is given a fresh injection of liquidity, in…

In financial terminology, the hasty sale of assets – and securities in particular – without regard to the proceeds (selling an asset or more specifically a title hurriedly and regardless of the price). Often…

Any noticeable, atypical fall of prices on a market, especially on the stock exchange. – It is difficult to assign general characteristics to the term, which specify the extent of the fall in prices,…

A term that emerged around 2000 to describe the fact that – bad debts (funds that are determined to be uncollectible) accumulate at banks during industry crises or that loan collateral loses value when…

A market participant expecting a bear market, usually selling an asset today to a later date. – See asset distress, bear market, bear, graveyard market, contermine, market, overbought. Attention: The financial encyclopedia is protected…

Generally an unethical sales technique where goods are advertised at a cheap price. If the customer then comes to the store, this product is not available (an unethical sales practice where low priced goods…

A coin with two heads, one behind the other, on the reverse, usually a pair of rulers. – See bishop’s coin, angel’s coin, emperor’s coin, reverse. Attention: The financial encyclopedia is protected by copyright…

Former fee for the use of the public bakehouse in rural communities. Usually, the fee did not include the heating of the baking oven. The tenant had to provide this himself at his own…

In general, the difference between the credit side and the debit side of an account. – In particular, in a balance sheet, the last line with the result as profit or loss (the result…

The result of one engagement or a series of transactions that end in a zero net sum gain. This, for example, may be the result of a loss on one investment and a gain…

The possibility offered by banks to retrieve the latest activities of account and the account position – via a data highway such as telephone, fax, Internet or mobile or – via a card at…

Comparison of existing and expected foreign exchange on the one hand and foreign exchange expenditures committed by the foreign exchange authority and therefore to be made on the other. Attention: The financial encyclopedia is…

Set of rules fundamental to national accounts, balance of payments statistics and central bank statistics, introduced by the International Monetary Fund. – See Balance of Payments. Attention: The financial encyclopedia is protected by copyright…

The balance of payments on current account is the balance of economic transactions with foreign countries within a given period. – Surpluses or deficits in a current account are the result of millions of…

Commonly used, especially in older financial terminology, for the final payment of an amount to be repaid contractually in installments. – See discount, final maturity, close-out, installment payment, redemption. Attention: The financial encyclopedia is…

The ongoing monitoring of sales and account balances – including the respective value dates and disposition balances – of as many accounts as possible. This was introduced at the latest in the course of…

In relation to banks, a figure defined by the list in Section 19 (1) of the German Banking Act (KWG). Attention: The financial encyclopedia is protected by copyright and may only be used for…

In connection with monetary policy, the effect of a central bank policy measure on the value of a company. Rising interest rates generally CETERIS PARIBUS darken the business prospects and therefore also reduce the…

Euphemistic expression (euphemism: a harmless word substituted for one considered unfavorable) that emerged in the course of the 2008 financial crisis to describe the sometimes very high loss write-downs that banks have to make…

The mandatory establishment by the supervisory authority of certain rules governing the financial reporting of institutions. – See banking supervision, European, enforcement, financial reporting. – Cf. BaFin Annual Report 2012, pp. 199 et seq.…

The misleading of the public by making statements in the balance sheet that do not correspond to the facts, usually with the aim of whitewashing (window-dressing). This is made almost impossible for banks by…

In the narrower sense, the systematic comparison of assets and liabilities, of assets and liabilities; the closing of accounts on a reporting date. – Due to the double-entry accounting practice, which has been adopted…

A comparison of assets and liabilities which, although usually prepared in accordance with valid accounting principles, does not reflect the actual financial position of the company. – If this happens in the case of…

Unless otherwise defined, this is the final amount after adding up all assets and liabilities of a balance sheet. – Cf. Deutsche Bundesbank Monthly Report of September 2013, p. 21 (interpretation problems with regard…

Specifically, the creation of equity out of thin air for ailing banks in some euro area countries. – In Spain, a law was passed in 2012 allowing the broad-based conversion of tax loss carryforwards…

The amount at which an asset or liability is recorded on the balance sheet. – See valuation, carrying amount, fair value, market value, option, fair value, impairment loss. Attention: The financial encyclopedia is protected…

In the wake of the Enron scandal in 2001, a term used to describe the fact that accounting does not reflect the course of business, as it should, but rather determines it. – Enron…

Unless otherwise defined, cash and cash in hand of a business entity in the account; sometimes, demand deposits are also added. Attention: The financial encyclopedia is protected by copyright and may only be used…

General term for an investment strategy in asset management. In this case, the portfolio is managed prudently and risk-bearing investments are avoided wherever possible. – In the case of certain contracts – especially for…

Special fund of a capital management company that contains various assets in its portfolio in a balanced manner. – In a narrower sense, a fund that includes first-class equities, i.e., blue chips, and fixed-income…

A company’s expenses for accounting in general and for the public presentation of its business situation in particular. – These costs increase when a company has to publish its financial statements in accordance with…

Basic rule according to which debts may never be offset against assets; both must always be shown separately from each other; see Section 246 HGB. Similarly, expenses may not be offset against income, nor…

A measure of a country’s comparative cost advantage (geographic comparative cost advantage) in the world market. This is the ratio of the share of a particular product type in a country’s exports, e.g. pharmaceuticals,…

It is assumed here that the theory of purchasing power parities applies only to internationally tradable goods. – If productivity in the sector of tradable products rises in a country, the prices for these…

In a geographical area, there are many small currency areas running side by side. The term was also frequently used in reference to the (Western) European countries before the introduction of the EUR. –…

In older documents also the name for bad money in general and in particular for coins whose core is made of iron (Eisenschröttling; Schröttling = metal blank; metal blank) or lead (Bleischröttling) and thinly…

The outstanding debt from a bond or from a loan that is still to be repaid by a residual payment at the end of the term. – See amortization, bond, balloon loan, bullet payment,…

A loan in which the final installment of repayment is particularly high. In other words, the bank customer pays relatively low amounts for regular amortization. At the end of the term, however, the remaining…

A bank temporarily or completely stops payments to a customer under a loan agreement because, as a rule, facts have become known that call into question the creditworthiness of the borrower. – In the…

In order to protect customers’ deposits from high-risk transactions in large universal banks, there have been several calls – and at the beginning of 2014 also from the EU Commission in the form of…

A biennial study published by the London-based Centre for the Study of Financial Innovation (CSFI) on the assessments and expectations of financial professionals at banks and in the industry worldwide; it is based on…

According to original plans – and from 1941 particularly advocated by the respected British national economist Lord John M. Keynes – a reserve medium tied to gold intended for the international monetary system. Special…

In a fixed exchange rate system – such as ERM II – central banks are obliged to secure the exchange rate of the currency as soon as it reaches an upper or lower limit…

In the case of fixed exchange rates, as in ERM II, the area left to free market operations before market intervention. The wider this spread range, the closer the system approaches floating exchange rates.…

In the case of a floater, the simultaneous purchase of a cap and sale of a floor. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without…

Account (in the sense of list, register) of deposits and withdrawals kept by an institution for the respective customer. – See account, call account. Attention: The financial encyclopedia is protected by copyright and may…

Experience shows that two main risks arise when a bank is acquired by another financial institution. – How good a bank’s balance sheet really is always becomes apparent after the acquisition. Only when the…

Experience shows that two main risks arise when a bank is acquired by another financial institution. – How good a bank’s balance sheet really is always becomes apparent after the acquisition. Only when the…

A short-term bill issued by public sector entities – primarily states and municipalities – to obtain interim financing for urgent projects that will eventually be funded long term through the sale of a bond…

A short-term bill issued by public sector entities – primarily states and municipalities – to obtain interim financing for urgent projects that will eventually be funded long term through the sale of a bond…

Approach proposed by academics to deal with distortions in the financial system. According to this plan, failing banks should not be supported directly by the state – i.e. ultimately by the taxpayer. Instead, according…

In older documents, a register that records the sales of a company. – According to IAS 39, the reported portfolio of loans and securities of a bank. – Other term for a bank savings…

Unless otherwise defined, this is the term used to describe the public demand – particularly in the wake of the subprime crisis and the subsequent financial crisis; in Germany, it was also increasingly demanded…

Unless otherwise defined, the equity capital of banks. – Cf. Monthly Report of the Deutsche Bundesbank of January 2002, p. 41 ff., Monthly Report of the Deutsche Bundesbank of March 2005, p. 19 ff.…

In principle, a bank sets the fees for its services itself. In most countries, however, they must be made known to the customer by posting notices or by other means. The supervisory authorities can…

Until about 1980, the larger banks had a hall (counter area), usually very high: the height was considered by some as an expression of the importance of the institution. Counters were arranged here in…

The assessment of – the marketability, understood here as the willingness that parts of the population are currently willing to buy goods of the customer, and – the sustainability of a borrower of the…

Security issued by banks as a debt obligation, usually with a fixed interest rate. – The Deutsche Bundesbank divides bank debt securities into – mortgage Pfandbriefe (formerly known as Pfandbriefe), which also include ship…

In 1947, the three Western occupying powers in Germany, namely England, France and the United States, decreed that the three major branch banks Deutsche Bank, Dresdner Bank – which was merged into Commerzbank in…

Number of bank branches per thousand inhabitants. Corresponding data and comparative values in statistics (e.g. Germany 2006: 0.58) should be viewed with caution because fully automated branches are sometimes included and sometimes not. –…

Independent central bank created in March 1948 as successor to the Reichsbank for the English and American zones – Bizone (bizonia) – in postwar Germany (occupied zones by the victorious powers after the end…

A term invaded from the sales industry for an institution that offers only a few simple and self-explanatory services, thereby keeping operating costs and especially personnel costs low. – See bank, bank size, optimal,…

The ECB publishes the number of employees in the euro area financial sector annually on its website and in the Statistics Pocket Book. Since 1998, the number of bank employees in the euro area…

Indicator published by the ECB at irregular intervals, the information content of which must of course be examined in detail for the respective purposes. In 2008, there was an average of 145 inhabitants per…

There can only be two reasons for bank failures, namely – risks are misjudged; this happens due to negligent credit assessment on the part of a single bank; other institutions follow the decision (herd…

In the financial crisis that followed the subprime crisis, it became clear that banks worldwide need to be made more resilient to possible distortions. The main ways of doing this are: – a higher…

Unless otherwise defined, this refers to the share that banks take in supplying companies with money. In the euro area, about seventy-five percent of all financing is channelled through banks. – See bank-based, financing.…