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Commercial Bank
A financial institution that accepts deposits and makes commercial loans, ranging from small community banks to large global institutions.
Depository Institution
Organizations that accept deposits from consumers and businesses, primarily categorized as banks.
Financial Intermediation
A process where a bank lends funds deposited by savers to entities needing capital.
Credit Services
Services provided by banks that include various types of loans and credit facilities for businesses.
Overdraft Facility
A bank service allowing customers to withdraw more money than is available in their account, creating a debit balance.
Municipal Securities
Bonds or notes issued by sub-sovereign government entities, often tax-exempt, to fund public projects.
Transaction Processing
Services that facilitate the processing of checks, cards, and electronic payments in banking.
Monetary Policy
The management of money supply and interest rates by a country’s central bank to target inflation and economic growth.
Basel Accords
A set of international banking regulations established to ensure banks maintain sufficient capital to cover risks.
Deposit Insurance
A government guarantee protecting depositors' funds in the event of a bank failure, typically covering a specified limit.
Broker-Dealer
A firm that trades securities for its own account or on behalf of customers, acting as a broker when executing trades.
Asset-based Lending
Loans secured by collateral, typically accounts receivable or inventory, emphasizing the quality of the collateral.
Fiduciary
An entity entrusted to manage assets on behalf of another party, with legally enforceable duties to act prudently.
FinTech Companies
Technology companies that provide financial services and often compete or collaborate with traditional financial institutions.
Leverage Ratio
A financial metric indicating the proportion of a bank's debt to its equity, used to evaluate risk.
Liquidity Coverage Ratio
A requirement for banks to hold sufficient high-quality liquid assets to cover net cash outflows during a stressed period.
Hedge Fund
A pooled investment fund that employs various strategies to earn active returns for its investors.
Private Equity
Investment capital that is not listed on a public exchange, often used to acquire private companies.
Credit Rating
An evaluation of the creditworthiness of a borrower in general terms or related to a specific debt or financial obligation.
Microfinance
Financial services aimed at low-income individuals or those without access to typical banking services.
Insurance Underwriting
The process by which an insurer evaluates the risk of insuring a home, car, or individual and decides on coverage terms.
Foreign Exchange Market (Forex)
The global marketplace for trading national currencies against one another.
Capital Adequacy Ratio (CAR)
A measure used by banks to determine the adequacy of their capital, assessing financial stability.
DeFi (Decentralized Finance)
Financial services using smart contracts on blockchains, aiming to bypass traditional financial intermediaries.
Securitization
The process of pooling various types of debt and selling them as bonds to investors.
Treasury Management
The corporate process of managing liquidity and mitigating operational, financial, and
Commercial Bank
A financial institution that accepts deposits from customers and makes loans to businesses and individuals. These banks can range in size from small community banks serving local needs to large global institutions that operate nationally or internationally.
Depository Institution
Organizations such as banks and credit unions that accept deposits from consumers and businesses. These institutions are primarily designed to safeguard these deposits while providing services like loans and payment processing.
Financial Intermediation
The process through which banks and similar institutions channel funds deposited by savers to borrowers who need capital. This mechanism is crucial for maintaining the flow of money in the economy.
Credit Services
Various financial products provided by banks that encompass different types of loans and credit facilities to assist businesses and individuals in accessing the funds they need for growth or emergencies.
Overdraft Facility
A service offered by banks that permits account holders to withdraw more money than is currently available in their checking account, resulting in a negative balance that the account holder must repay.
Municipal Securities
Bonds or promissory notes issued by local government entities to fund public projects, such as schools and highways. These securities are often exempt from federal income tax.
Transaction Processing
The systems and services that banks use to handle financial transactions, including the processing of checks, electronic transfers, and card payments, ensuring accuracy and security.
Monetary Policy
The strategic actions taken by a nation's central bank to control the supply of money circulating in the economy and influence interest rates, aiming to achieve macroeconomic objectives like controlling inflation and fostering economic growth.
Basel Accords
A set of international banking regulations created to increase financial stability by ensuring banks maintain enough capital to cover their risks, therefore protecting depositors and the economy.
Deposit Insurance
A government-backed guarantee that protects individuals' savings in banks. Should a bank fail, deposit insurance provides coverage to depositors up to a specified amount, usually to prevent loss of their savings.
Broker-Dealer
A firm or individual that buys and sells securities (stocks, bonds, etc.) for its own account or on behalf of customers, acting as a broker when executing trades for clients.
Asset-based Lending
Loans that are secured by an asset, such as property or inventory, where the lender can claim the collateral if the borrower fails to repay the loan, emphasizing the value of the underlying asset.
Fiduciary
An individual or institution entrusted with managing assets on behalf of another party, bound by legal and ethical duties to act in the best interest of the beneficiary.
FinTech Companies
Innovative technology businesses that provide financial services through digital platforms, often enhancing or challenging traditional banking methods by offering faster and more user-friendly solutions.
Leverage Ratio
A financial ratio that measures the proportion of a bank's debt compared to its equity, used to assess the bank's financial stability and risk level.
Liquidity Coverage Ratio
Regulatory requirement that mandates banks to maintain a certain level of high-quality liquid assets, ensuring they can meet short-term financial obligations during times of economic stress.
Hedge Fund
A pooled investment vehicle that employs various strategies, including leveraging and short-selling, to maximize returns for its investors, often targeting wealthier individuals or institutions.
Private Equity
Investment funds that invest directly in private companies or buy out public companies, aiming to improve their performance and eventually sell them for a profit.
Credit Rating
An assessment of the creditworthiness of a borrower or the likelihood of default on a financial obligation, used by lenders to gauge risk when extending credit.
Microfinance
Financial services, including small loans and savings accounts, aimed at low-income individuals or those lacking access to traditional banking, promoting entrepreneurship and financial inclusion.
Insurance Underwriting
The process by which insurers evaluate the risks associated with insuring a person, property, or business, determining whether to provide coverage and under what terms.
Foreign Exchange Market (Forex)
The global marketplace where currencies of different countries are traded against each other, influencing the exchange rates and international trade.
Capital Adequacy Ratio (CAR)
A critical measure used by banks to assess their capital reserves in relation to their risk-weighted assets, ensuring they are financially stable and can absorb potential losses.
DeFi (Decentralized Finance)
A financial ecosystem built on blockchain technology that offers financial services like lending and trading without the need for traditional financial intermediaries, enabling transparency and accessibility.
Securitization
The financial process of pooling various kinds of debt—including mortgages, car loans, or credit card debt—and selling them as bonds to investors to raise capital.
Treasury Management
The corporate practice of managing a company’s financial assets, including handling cash flows, investments, and financing strategies to optimize liquidity and reduce risks.
Savings Account
A deposit account that earns interest on the funds deposited and allows limited withdrawals.
Checking Account
A deposit account that provides easy access to funds through checks, debit cards, and electronic transfers.
Certificate of Deposit (CD)
A savings product where money is locked for a specified term in exchange for higher interest rates.
Interest Rate
The amount charged by lenders to borrowers for the use of money, typically expressed as a percentage.
Nominal Interest Rate
The stated interest rate on a loan or investment, not adjusted for inflation.
Real Interest Rate
The nominal interest rate adjusted for the effects of inflation, reflecting the true cost of borrowing.
APR (Annual Percentage Rate)
The yearly interest rate reflecting the cost of borrowing, including fees, expressed as a percentage.
Credit Union
A member-owned financial cooperative that provides traditional banking services, often with better rates than banks.
Collateral
An asset pledged by a borrower to secure a loan, which can be forfeited in case of default.
Default Risk
The risk that a borrower will be unable to make required debt payments.
Creditworthiness
An assessment of a borrower’s ability to repay debt, often evaluated using credit scores.
Loan-to-Value (LTV) Ratio
A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
Risk Management
The process of identifying, assessing, and controlling threats to an organization’s capital and earnings.
Asset Management
The management of investments on behalf of clients, aiming to grow their assets over time.
Equity
The ownership interest in a company, represented by shares or stock, after liabilities have been deducted.
Debt Financing
The process of raising funds by borrowing, typically through bonds or loans that must be repaid with interest.
Equity Financing
Raising capital through the sale of shares in a company, giving investors ownership stakes in exchange for funding.
Venture Capital
A form of private equity financing provided by investors to startup firms and small businesses with perceived long-term growth potential.
Crowdfunding
The process of raising funds from a large number of people, typically via the internet, to finance a project or business.
Investment Portfolio
A collection of financial assets such as stocks, bonds, commodities, or real estate held by an investor.
Market Capitalization
The total value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.
Hedge Fund Manager
An individual who manages a hedge fund, employing various strategies to maximize returns for investors.
Financial Statement
Formal records of the financial activities and position of a business, person, or entity, including income statements and balance sheets.
Balance Sheet
A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.
Income Statement
A financial statement showing a company's revenues and expenses during a specific period, leading to net income or loss.
Cash Flow Statement
A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
Diversification
A risk management strategy that mixes a wide variety of investments within a portfolio to reduce exposure to any single asset.
Financial Literacy
The ability to understand and effectively utilize various financial skills, including personal financial management, budgeting, and investing.
Regulatory Compliance
The process of ensuring that a company follows relevant laws, regulations, guidelines, and specifications relevant to its business.
Financial Crisis
A situation where the value of financial institutions or assets drops rapidly, often leading to widespread economic disruption.
Behavioral Finance
The study of the influence of psychology on the behavior of financial practitioners and the subsequent effect on markets.
Peer-to-Peer Lending
A method of borrowing and lending money without the involvement of an official financial institution, using online platforms.
Taxation
The process by which a government collects financial contributions from its citizens to fund public services and projects.
Performance Metrics
Quantifiable measures used to evaluate the success and efficiency of a financial investment or business operation.
Retirement Account
A savings account specifically designed for retirement, often with tax benefits, such as 401(k) or IRA.
Publicly Traded Company
A corporation whose shares are offered to the public and traded on stock exchanges.
Fixed Income Investment
An investment that provides regular income payments, such as bonds, which are repaid at maturity.
