English

The monetary value of expenditure by private households as determined by official statistics and broken down by groups of goods in the price index of the standard of living. – See procurement shifts, Harmonized Index of Consumer Prices, inflation measurement, composition effect, quality changes. – See the annex “Euro area statistics” to the respective ECB… read more »

In an institution, the ability to provide business and information to customers within a given framework. – See churn rate, accessibility, ease of use, relationship management, call center, container banking, remote access, automated teller machine, branch, fully automated, well-managed, intensive care unit, customer defense service, customer retention, customer service, customer care agent, service line. Attention:… 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 »

In the financial sector, the payment of employees. After the financial crisis that followed the subprime crisis, there was a call for compensation to be based on the risk taken and the sustained success of the business. In addition, business failures should also be taken into account. – In April 2009, the Financial Stability Board… read more »

A vendor grants a loan to a buyer so that the buyer can use this money to purchase goods from the vendor (the lending of money by a company to one of its customers so that the buyer can purchase products from it. By doing this, the company increases its sales, even though it is… read more »

Receivables of one or more banks are – combined into a package (bundle, pool, special asset, portfolio), – the credit risk is separated by means of a credit derivative, and – the credit risk is sold to a special purpose entity; the credit receivable, however, remains – in the Difference from true sale securitization –… 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 »

Rule of thumb calculated in the USA in connection with the subprime crisis, according to which banks reduce new loans to be granted by ten USD for a loss of one USD. In the case of institutions operating with a very high proportion of borrowed capital, this ratio was often even higher. No reliable figures… 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 »