on 2023/07/21 by alex1, []

The higher capital ratio required under Basel III is not only mathematically possible by increasing the numerator (an institution’s capital). Rather, a reduction in the numerator (a decrease in assets) is also possible. Such a reduction is desirable as far as risky financial instruments and proprietary trading positions are concerned. However, such a reduction would […]

on 2023/07/21 by alex1, []

In the case of currency options, the underlying is in the usually a specific currency amount. In this case, the at-the-money strike price often does not refer to the price of the underlying on the spot market prevailing at the time of the transaction. Rather, the strike price is based on the current forward price […]

on 2023/07/21 by alex1, []

Contractual agreement commonly used in credit insurance, according to which the policyholder must disclose his debtor (i.e., the customer to whom he is taking out insurance against a credit event) to the insurer for the purpose of any credit assessment above a specified amount (e.g., 50,000 euros). – See probability of default, liability, credit risk, […]

on 2023/07/21 by alex1, []

A committee composed of the various experts of a capital management company, bank or insurance company that meets regularly to discuss purchases and sales of securities and other assets (such as investments, precious metals, real estate, works of art, options). Usually, the investment committee also has decision-making power. – See advisor, asset-liability committee, actuary, investment […]

on 2023/07/21 by alex1, []

The excessive (usually, more than thirty percent) accumulation of a particular asset in a portfolio. Usually, more than thirty percent of such a concentration (an asset making up a substantial part, usually, more than 30 percent, of the investor’s portfolio). – See investment diversification, asset class, investment risk, order fund, risk management, polygon, magic. Attention: […]

on 2023/07/21 by alex1, []

A bond without a final maturity date, usually issued by the government. – Theoretically, their term is infinite. However, they almost always contain a call option on the part of the issuer, often in the form of an exchange offer. – See gilt, consols. Attention: The financial encyclopedia is protected by copyright and may only […]

on 2023/07/21 by alex1, []

A security that is protected against changes in the value of money in terms of the payments contractually flowing from it (regular interest) and in terms of repayment (redemption) (bonds whose principal and coupon are indexed to inflation, cutting out inflation risk). – See bond, index-linked, federal securities, monetary value, inflation protection, capital investment, capital […]

on 2023/07/21 by alex1, []

A bond in which the interest rate increases with increasing time from issuance (a bond that pays an interest rate for an initial period which then increases to a higher rate), where the times and interest rate steps are specified in advance in the bond conditions and are thus known. – In the reverse case, […]

on 2023/07/21 by alex1, []

The obligation of citizens to accept the legal tender introduced by the state in the form of coins and notes. – See cash, validation, dollarization, cryptocurrency, money ownership, money functions, money reflux, capital flight, secondary currency, parallel currency, regional money, commodity money, currency, money by halves, means of payment, central bank money, cigarette currency. Attention: […]

on 2023/07/21 by alex1, []

A committee of representatives of the relevant departments at the level of an individual bank or at the top level of the bank (Group management) that deals with the management of interest rate risk, develops relevant proposals and forwards them to the Board of Managing Directors. – See asset interest rates, actuary, investment committee, liquidity […]