Crash of 2008/Related Articles

Glossary

(there are a broader glossaries on the Related Pages subpage of the articles on the subpage on the articles on financial engineering and on the finance system and more detailed glossaries on the subpages of the articles on banking, bank failures and rescues and the subprime mortgage crisis)

• ABCP [r]: Add brief definition or description
• Agency cost [r]: Add brief definition or description
• Arbitrage [r]: transactions to take advantage of a price differences of a product in different markets by buying where it is cheap and selling where it is dear. The possibility of arbitrage often prevents the occurrence of price differences. ^[e]
• Basel I & Basel II [r]: international banking regulations put forth by the Basel Committee on Bank Supervision of the Bank for International Settlements requiring banks' minimum capital adequacy ratios to be related to the riskiness of their loans. ^[e]
• Beta [r]: Please do not use this term in your topic list, because there is no single article for it. Please substitute a more precise term. See Beta (disambiguation) for a list of available, more precise, topics. Please add a new usage if needed.
• Building society [r]: UK mortgage lender, British counterpart of Savings and Loans. ^[e]
• Capital adequacy ratio [r]: The ratio of a bank's capital to its risk weighted credit exposures. May be defined in terms of tier 1 (core) or tier 2 capital. ^[e]
• Capital Asset Pricing Model [r]: (CAPM) a model which relates the rate of return of an equity to the equity market rate of return and to that equity's beta factor (see the formula at [1] and see the definition of beta ). ^[e]
• CDO [r]: Collateralised Debt Obligation. A portfolio of corporate bonds, grouped into tranches that are ranked by estimated risk. ^[e]
• CDS [r]: Credit-Default Swap. An insurance agreement that guarantees protection against a bond default in return for a fee. ^[e]
• Central Bank [r]: A government agency that is responsible for monetary policy and the support of the banking system (for example the Federal Reserve Board and the Bank of England). Usually responsible for controlling a country's monetary policy and preserving the value of its currency. ^[e]
• CMO [r]: Collateralised Mortgage Obligation. A portfolio of mortgages, grouped into tranches that are ranked by estimated risk ^[e]
• Commercial paper [r]: unsecured debt_instruments that are issued by corporations to meet short term financing needs (usually repayable after 3 months). ^[e]
• Credit risk [r]: The risk that the value of a loan-based security will fall as a result of defaults on the part of borrowers (as distinct from interest rate risks and exchange rate risks). ^[e]
• Debt_instrument [r]: A formal obligation assumed by a borrower to replay the lender in accordance with the terms of an agreement, including bonds, debentures, promissory notes, leases and mortgages. ^[e]
• Derivative [r]: An asset whose value depends upon the expected value of another asset. ^[e]
• Discounting [r]: (i) The action of selling a bill of exchange before its due payment (or "maturity") date "at a discount": that is to say after paying the purchaser a fee for accepting it. (ii) The practice of calculating the current equivalent of a future cost or benefit by the application of a chosen discount rate. ^[e]
• Discount_rate [r]: (i) The percentage by which current value exceeds value in a year's time. (ii) The rate at which banks may borrow at their central bank's discount window. ^[e]
• Discount window [r]: A facility provided by central banks that enables a bank to make secured short-term loans at its central bank's discount rate. ^[e]
• Fannie Mae [r]: (Federal National Mortgage Association) US government-sponsored enterprise created to provide financial support to Savings and Loans. Privatised in 1968. ^[e]
• Financial_regulator [r]: The United States Securities and Exchange Commission gives as its mission "to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation". Financial regulators in other countries have similar responsibilities. ^[e]
• Gearing: see Leverage
• Freddie Mac [r]: (Federal Home Loan Mortgage Corporation) Fannie Mae clone created to provide competition to Fannie Mae. ^[e]
• Hedging [r]: Protecting against price changes by simultaneously buying(/selling) an asset and making a futures contract to sell(/buy) it. ^[e]
• Hedge fund [r]: A limited-membership, aggressively-managed investment fund, often escaping regulation. ^[e]
• Interbank market [r]: a market in which a group of banks lend to each other (for example, see LIBOR). ^[e]
• Interest rate risk [r]: Add brief definition or description
• Leverage [r]: Add brief definition or description
• LIBOR [r]: Add brief definition or description
• Liquidity [r]: Add brief definition or description
• Liquidity risk [r]: Add brief definition or description
• Margin account [r]: Add brief definition or description
• Margin call [r]: Add brief definition or description
• Market risk [r]: Add brief definition or description
• Money market [r]: Add brief definition or description
• Moral hazard [r]: Add brief definition or description
• Option [r]: Add brief definition or description
• Portfolio insurance [r]: Add brief definition or description
• Prime rate [r]: Add brief definition or description
• Recession (economics) [r]: Add brief definition or description
• Reserve ratio [r]: Add brief definition or description
• Risk premium [r]: Add brief definition or description
• Roll-over [r]: Add brief definition or description
• Savings and loans [r]: Add brief definition or description
• Securitisation [r]: Add brief definition or description
• Selling short [r]: Add brief definition or description
• Structured investment vehicle [r]: Add brief definition or description
• Subprime lending [r]: Add brief definition or description
• Swap: see CDS
• TARP [r]: Add brief definition or description
• Tail risk [r]: Add brief definition or description
• Value at risk [r]: Add brief definition or description
• Warrant [r]: Add brief definition or description
• Wholesale banking [r]: Add brief definition or description