English

In former times, in some places, a customary payment to a clergyman for commemorating individual persons by name during the divine service in general – and during the COMMEMORATIO PRO VIVIS before the consecration…

Memoranda of understanding between supervisory authorities that enable cross-border cooperation in the context of administrative assistance. Supervisors agree to comply with requests for notification in investigations of insider trading, market manipulation, or other violations…

Memoranda of understanding between supervisory authorities that enable cross-border cooperation in the context of administrative assistance. Supervisors agree to comply with requests for notification in investigations of insider trading, market manipulation, or other violations…

Generally in the financial market, an agreement between the partners on how a transaction should proceed in detail (when a framework for private negotiations has been defined, a memorandum of understanding is often signed…

Platform for global cooperation among insurance supervisory authorities. – Cf. Annual Report 2007 of BaFin, p. 71 f. (BaFin’s share in the establishment; conditions for the admission of new members; involvement in other bodies)…

In older literature, the records of all business transactions that do not belong in the cash book, the account book (invoice book), or the dispatch book. – See Faktura, Geheimbuch, Hauptbuch, Kassabuch, Kassenstrazze, Rapiat,…

In older documents, a payment for a mass for souls (MISSA PRO DEFUNCTIS) customary in Catholic parishes; often celebrated annually on an appointed day and fed from the interest (memorial annuity) of an appropriately…

Expenses incurred by a company when purchase prices, production costs, sales prices, and other items must be continuously recalculated due to inflation. – See monetary neutrality, long-term, monetary stability, inflation compensation, menu costs, shoe…

In general, all the consumption of services that companies incur in the event of inflation as a result of the loss of the measurability of money. These are mainly additional expenses for – the…

In older financial parlance, an institution focusing on transactions with wholesale and retail businesses, often with the connotation of being limited to a narrower domestic economic area. – Institute specializing especially in financing foreign…

Unless otherwise defined, all services provided by a bank to corporations (bank business mainly in offering financial services to corporations). – See Investment banking, Private banking. Attention: The financial encyclopedia is protected by copyright…

Company acquisitions and mergers, even outside the financial markets, ultimately also affect the financial markets because of the large payments involved, which usually affect foreign currency areas. Therefore, central banks monitor such activities, and…

An agreement, particularly common in financial markets, between several parties to have all transactions handled by only one partner (the metist) in order to save costs. Any profits and losses arising from the transaction…

In older documents, a turnaround in business activity, usually in the sense of now higher sales (a change in the course of economic activity and commonly understood in the direction of a rise in…

A term that emerged around 2005 to describe the fact that, globally speaking, the cost of living increases in all countries when the price of metals rises, and here again particularly for copper and…

Bonds – mainly of the Russian and Austrian states in the 19th century – which, according to the terms of issue, were to bear interest in heavy money. – See integrals, lombards. Attention: The…

In older financial language, adherent of the view that the value of money is based – entirely on its substance – usually gold or silver – or yet – on its backing by precious…

The benefits of a network increase in proportion to the square of the number of connected users. – This principle was confirmed, among other things, by the introduction of online banking, which grew very…

Term for the fact that people in developed countries are getting older and older. This tends to put pressure on the currencies of the countries or currency areas that are particularly affected by aging,…

In old documents, the levy on the import of goods into the Turkish dominions; an import duty. This was between eight and ten percent of the value of the goods. – See toll, customs…

Risk capital in the form of unsecured loans with equity character; loans that fill the financing gap between equity and debt in the capital structure, especially for growth companies and for takeovers and leveraged…

Special fund of a capital management company with the purpose of providing companies with mezzanine capital as desired. The fund usually provides a company with debt mezzanine capital in the form of subordinated loans.…

In the course of a true sale securitization, the second-degree claimants. The holders of the senior tranche are served first, followed by the holders of the first-loss tranche (equity tranche, junior tranche). – See…

At the ECB, the common abbreviation (especially also used in statistics) for a monetary financial institution. – See bank, institution. Attention: The financial encyclopedia is protected by copyright and may only be used for…

Method of hedging in which only the individual open position (underlying transaction) is hedged by establishing an offsetting position (hedging transaction). – Regulators require that the underlying and hedging transactions be clearly assigned; the…

Loans to microenterprises, of which there are around 550 million worldwide. In many cases, these companies are excluded from normal financial services and are often at the mercy of usury. To the extent that…

An insurance company that – due to a fixed business policy – targets only a certain group (e.g. rice farmers) or – due to insufficient demand for insurance services is limited to a small…

In stock exchange parlance, the shares of medium-sized companies, insofar as these are listed on a stock exchange (mid-cap stands for middle capitalization; these are averagesized companies by market capitalization in a given market,…

Citizens of a country who are particularly affected by inflation – but also by measures such as wage caps and budget cuts during times of crisis (the section of society regarded as particularly affected…

A term that emerged around 2000 for areas of banking activity that cannot be assigned to the front-office area but, on the other hand, can hardly be included in the back-office area. As an…

Unless otherwise defined, in the context of the Single European Payment Area (SEPA), this refers to the transition from the previous national payment traffic systems to a single EU payment traffic area. This should…

In the financial market, for the transfer of a natural or legal person’s domicile from one territory to another, usually for regulatory or tax reasons (the removal of one’s legal residence or citizenship from…

In older documents, the payment of a messenger who had to deliver urgent letters or files to a recipient. The basis for the payment was either the entire distance or a high percentage of…

The price of milk and dairy products – such as butter, cottage cheese, cream or cheese – has a signal function for consumers, even though the weight of these goods in the Harmonized Index…

In stock market parlance, the term for the final phase of a bull market. Experience shows that shares and other assets are now being sold by a large number of people who are completely…

In the past, the commercial operators of a mill had to pay a tax in cash (water rate: payment for the use of water power). Water bodies were considered state property. The use of…

Term occurring in various meanings. – In older documents and only the last two digits on a coin finished after the year 1000 (the last two digits in the year of issue on a…

Very large loans granted by a credit institution to a single borrower or to a contiguous borrower unit. Such loans are subject to special supervision by the supervisory authorities. – Germany has had its…

Guidelines issued by the German Federal Financial Supervisory Authority (BaFin) in December 2005 relating to the organization of credit operations (best practices) based on Section 25a, Paragraph 1 of the German Banking Act (KWG).…

In older financial parlance, shares or mining company cuxes. – See Poseidon bull market. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University…

In older documents, the fee set by the responsible mining authority for surveying work in mining. In old documents, the officially appointed and usually sworn surveyor for underground areas is also called mine surveyor,…

A highly indebted member of a monetary union becomes insolvent, triggering a crisis and a currenry swing. – In 1999, the governor of the Brazilian province of Minhas Gerais declared that the province’s debt…

A proposal that arose in the course of the 2008 financial crisis, according to which every bank should split itself into a good and a bad part. The good part would serve the healthy…

The lowest amount allotted to counterparties in a tender operation. The ECB may decide to allot a minimum amount to each counterparty in its tender operations. Attention: The financial encyclopedia is protected by copyright…

The lowest percentage of bids allotted at the marginal interest rate in tender operations with the ECB. The ECB may decide to introduce a minimum allotment ratio in tender operations. – See the annex…

In German budgetary law, the transfer of any surplus revenue from the administrative account to the asset account for the purpose of extinguishing debts. – In the case of an insurance company, the obligation…

The lowest interest rate at which counterparties may submit bids in a variable rate tender. – At the ECB, this rate has taken over the key interest rate function previously performed by the fixed…

See capital ratio, regulatory. 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,…

The minimum volume of business that must be transacted before a trade can be concluded on the stock exchange. The respective stock exchange rules and regulations generally contain precise provisions in this regard. –…

Regulatory term used in connection with banks’ internal monitoring systems. The German Federal Banking Supervisory Office (Bundesaufsichtsamt für das Kreditwesen) enacted such standards in 1995 for the internal control system in the area of…

Regulation by the central bank – as in the U.S.A. – or the supervisory authority that, in the case of (consumer) loans, the banks must demand at least the fixed monthly payment rate for…

The following applies to a bank according to Basel II requires a minimum core capital ratio of four percent. During the financial crisis that followed the subprime crisis, there were calls to increase this…

The fact (based on experience) that consumers generally attach greater value to present goods than to future goods. In other words, to-day’s goods have a higher degree of desire for a person. Therefore, if…

Regulatory provisions for life insurers on how the minimum funding requirement is to be established. – Cf. BaFin Annual Report 2007, p. 81 f. (new minimum funding ordinance as of the beginning of 2008),…

In the case of capital management companies, the minimum investment amount – usually defined in the Articles of Incorporation – that an investor must invest when purchasing fund units (the smallest share quantity that…

Order by the central bank – as in the U.S.A. – or the supervisory authority that in the – installment purchase of long-term consumer goods, – credit purchase of securities, especially stocks, the purchaser…

Arrangements mandated by regulators in the event that an institution runs into difficulties. – See resolvability, resolution mechanism, unified, bad bank, bail-out, bank, systemic, bank hospital, Bank Recovery Act, bank testament, Crisis Management Groups,…

Regulations issued by the German Federal Financial Supervisory Authority in 2005 in anticipation of the corresponding provisions of Basel II on how banks should keep their risks manageable and under control. MaRisk fleshes out…

Unless otherwise defined, the amount that banks must hold with the central bank in its monopoly money. – See minimum reserve requirement, minimum reserve requirement. Attention: The financial encyclopedia is protected by copyright and…

Employees whose output (marginal product of labor: the change in output per unit change in labor) is lower than the prescribed minimum wage will sooner or later be laid off. They now become a…

A one-time or ongoing fee paid to a landowner for the right to mine natural resources on his land. Attention: The financial encyclopedia is protected by copyright and may only be used for private…

Consultative round of finance ministers and central bank presidents from 11 countries, in addition to the G7 excluding Italy, Belgium, the Netherlands, Switzerland, Sweden and Canada. The President of the ECB attends the meetings…

Consultative meeting of finance ministers and central bank presidents of the G7 countries plus Argentina, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. The President of the ECB…

Consultative panel of finance ministers and central bank presidents from Canada, France, Germany, Italy, Japan, the United Kingdom, Russia and the United States. – See ECB Monthly Bulletin, January 2001, p. 81 (presentation of…

An industrial facility which manufactures coins for currency by authority of the government. – The city or location where coins are struck as part of the minting process. In the past, most coins carried…

In earlier times, the legally fixed rate of exchange or the market mint ratio of gold coins to silver coins. – In a narrower sense, the price of one ounce of gold divided by…

The production cost (material cost, manufacturing cost, administrative overhead) of a coin. – See coinage profit, strike rate, seigniorage. Attention: The financial encyclopedia is protected by copyright and may only be used for private…

In the financial market, incorrect recommendations made by financial advisors or bank employees to customers, particularly with regard to investments. – In the case of insurance companies, miscounselling usually relates to proposals to insured…

In general, a deep-seated enmity against everything connected with money (Greek: misos = hatred, chrema = money). Such an aversion can be found especially among some literary people, who, of course, are usually very…

In relation to the financial market, the intentional, calculated reporting of lower items, such as turnover, profit or market share, in order to deceive the supervisory authority, the tax office or anti-trust authorities. –…

In ancient documents, coins or medals that were thrown among the crowd on ceremonial occasions. Today this is still partly at so-called “celebrity weddings” in Schwang. – See Grielgeld. Attention: The financial encyclopedia is…

Falschtransaktion and in English-language jargon also bust): In the financial market, a transaction that comes about through the erroneous entry of orders and can be reversed; a trade erroneously entered. – See BaFin Annual…

According to the EU definition, these include – microenterprises (independent, autonomous companies that employ fewer than ten people and whose turnover or end-of-period balance sheet does not exceed EUR 2 million) – small and…

A state-subsidized bank called for by politicians in Germany with the sole purpose of granting loans to medium-sized enterprises. – However, the poor equity capitalization of SMEs by international standards is more likely to…

Loans to small and medium-sized enterprises (SMEs) and handicrafts, usually granted as part of the government’s promotion of SMEs and supported by special measures such as interest subsidies and guarantees. – Because SMEs in…

EU body established in 1999 under the chairmanship of the European Commission with the main objective of advising the Commission on supervisory issues relating to financial conglomerates. – Cf. ECB Monthly Bulletin of May…

Settlement of banking transactions by means of WAP-enabled cell phone (Handy [plural Handys und Handies] sometimes also Händi: so said only in German; otherwise cell[ullar] phone or mobile [phone]). – See bank portal, payment…

In a general economic sense, the ability to adapt easily and – depending on the circumstances – comparatively quickly to changing market conditions. – In the financial market, the ability of financial market participants…

In relation to the financial market, a draft published by the supervisory authority showing how a basic operating procedure might be defined. Such specifications are of an exemplary nature and are intended to facilitate…

A risk management strategy is implemented on the assumption of a specific model. However, it is not certain whether the model used as a basis also reliably reflects reality. Model risk therefore always arises…

Because there are gaps in our knowledge of the constantly changing structure of macroeconomic relationships, there is always uncertainty, especially in central bank policy, about the most appropriate monetary policy measures. In particular, it…

Working group of the Basel Committee tasked with designing procedures for the Internal Ratings-Based Approach (IRBA) to be newly introduced under Basel II. – See BaFin’s Annual Report 2003, p. 38 ff., BaFin’s Annual…

The central bank uses economic models to form a picture of the expected development of the price level. Such models must be as accurate as possible in depicting the interrelationships between the price level,…

A measure of how a bond’s price has changed in response to a one-percent change in market interest rates (the modified duration of a bond measures the observed percentage change in its price for…

In a perfect financial market and in the absence of taxation there is no such thing as an optimal capital structure; the overall cost of capital remains the same regardless of the firm’s debt…

After 1970, a popular name for the state subsidy paid to older students in Germany to finance their school education. Mofa = motorized bicycle; generic term for various mopeds; CH: Töffli. – See beer…

Unless otherwise defined, the speed at which prices on a stock exchange change. The faster the speed of a price movement, the higher the value of the movement variable. – For a particular stock,…

Another term for the quantity of movement. – Closer to the measure for the speed – also called tractive force – of a price movement. The benchmark is the current price minus the price…

Stocks that have had an above-average increase in performance in earlier periods will continue to outperform stocks that have suffered losses. Statistically, the momentum thesis seems to be demonstrable. There are various possible explanations…

Former additional payment for the wages of a craftsman who worked on the first day of the week, Monday. – Despite many efforts on the part of the guilds, the sovereigns and even the…

The fact that Monday is usually the weakest day of the week on the stock market. Until now, financial market theory has not been able to provide a completely convincing explanation of why this…

Unless otherwise defined, Monday, October 19, 1987. On this day, the sharpest global price drop in (recent) financial history occurred; stock prices plunged more than twenty percent (the black Monday refers to Monday October…

With regard to the European Monetary Union, the representatives of the opinion that a secretive currency would sooner or later compulsorily bring about the unification of an economic area that also had different characteristics.…

In general, the sum of currency in circulation plus demand deposits at the central bank, i.e. money created by the central bank. Central banks rightly attach great importance to this statistical measure, which is…

Money held for investment purposes. – In the terminology of the ECB, the sum of all longer-term claims of domestic non-banks on the banking system which are not part of the respective delimitation of…

Included in the statistics for monetary financial institutions as the sum of – deposits with an agreed maturity of more than two years, – deposits redeemable at notice of more than three months, –…

Formulas for measuring short-term changes in interest and exchange rates, weighted according to their corresponding impact on macroeconomic variables, especially real GDP and prices. Such formulas are sometimes used by central banks to forecast…

In the U.S.A., the requirement, in force since 1980, that all central bank services must be recorded in a cost accounting system that corresponds to the actual costs incurred or charged by corresponding private…

Unless otherwise defined, the increase in the money supply by the central bank. – See financial investment, money bomb, inflation, liquidity provision, liquidity trap, lug-and-frog thesis, low interest rate policy, quantitative easing. Attention: The…

The economic meaning of a monetary unit, such as the USD or the EUR; its “background” in terms of the economic framework, namely: – population (people), – space (area), – science and technics, –…