European Central Bank (ECB)
The Central Bank for the new European Monetary Union.
Similar financial termsEuropean Union (EU)
The European Union (EU) is a union of twenty-five independent states based on the European Communities and founded to enhance political, economic and social co-operation. The union was formerly known as the European Community (EC) and European Economic Community (EEC).
The common currency in the EU is the euro (EUR. Still, some countries have chosen to stay outside the European Monetary Union.
At the moment, the 25 member states are:
- Austria (EUR)
- Belgium (E ...
European Economic Area (EEA)
The European Economic Area (EEA) came into being on 1 January 1, 1994 following an agreement between the European Free Trade Association (EFTA) and the European Union (EU). It was designed to allow EFTA countries to participate in the European Single Market without having to join the EU. In a referendum, Switzerland (ever keen on neutrality) chose not to participate in the EEA (although it is linked to the European Union by bilateral agreements similar in content to the EEA agreement), so the cu ...
European Economic Community (EEC)
Now incorporated in the European Union (EU).
This occurs when someone is unable to pay their debts and creditors move to secure what monies they can from any existing assets (property) held by that person. All property is then administered by the official receiver. A bankrupt - if still able to work - will only receive an allowance to live on after payments are made to creditors
A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as agent for the parent bank.
A multilateral development finance agency created by the 1944 Bretton Woods, New Hampshire negotiations. It makes loans to developing countries for social overhead capital projects, which are guaranteed by the recipient country.
Wholesale mortgage banking
The purchasing of loans originated by others, with the servicing rights released to the purchaser.
A bankruptcy in which a debtor and its creditors pre-negotiate a plan or reorganization and then file it along with the bankruptcy petition.
PIBOR (Paris Interbank Offer Rate)
The deposit rate on interbank transactions in the Eurocurrency market quoted in Paris.
Money center banks
Banks that raise most of their funds from the domestic and international money markets , relying less on depositors for funds.
A British term for a bank that specializes not in lending out its own funds, but in providing various financial services such as accepting bills arising out of trade, underwriting new issues, and providing advice on acquisitions, mergers, foreign exchange, portfolio management, etc.
A legal proceeding for liquidating or reorganizing a business.
Bank anticipation notes (BAN)
Notes issued by states and municipalities to obtain interim financing for projects that will eventually be funded long term through the sale of a bond issue.
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized yield , based on a 360-day year.
A draft addressed to a bank.
Line of credit granted by a bank to a customer.
A computer message system linking major banks. It is used not for effecting payments, but as a mechanism to advise the receiving bank of some action that has occurred, e.g. the payment by a customer of funds into that bank's account.
A short-term credit investment created by a non-financial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts from face value in the secondary market. These instruments have been a popular investment for money market funds. They are commonly used in international transactions.
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which serves as a forum for monetary cooperation among several European central banks, the Bank of Japan, and the U.S. Federal Reserve System. Founded in 1930 to handle the German payment of World War I reparations, it now monitors and collects data on international banking activity and promulgates rules concerning international bank regulation.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from the stockholders to the bondholders.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt finaning.
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely with debt.
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value payments operated by a group of major banks.
A merchant banking subsidiary set up by several banks that may or may not be of the same nationality. Consortium banks are common in the Euromarket and are active in loan syndication.
Basel Committee on Banking Supervision
A committee that meets under the auspices of the Bank for International Settlements in Basel, Switzerland to set bank regulatory standards.
Federal Home Loan Bank Act of 1932
Law that created the Federal Home Loan Bank Board and a network of regional home loan banks.
Federal Home Loan Bank Board (FHLBB)
The FHLBB is an agency responsible for regulating and controlling savings and loan institutions, superseded by FIRREA in 1989.
Joint stock bank
A joint stock bank is one operated by a joint stock or limited company. It is therefore a bank with limited liability. This is in contrast to a private bank which may be owned by a family or individual. All commercial banks in the United Kingdom are joint stock banks.
International Financial and Banking Centre (IFC)
A country identified as being a tax haven.