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ERM Glossary: General financial terms (with a bias towards banking) helpful for ERM students

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Definitions of some general financial terms (with a bias towards banking) relevant to Enterprise Risk Management (ERM) are:

 

-          Asset-backed commercial paper

-          Asset-backed security

-          Alt-A loan

-          Arrears (or delinquency)

-          Backwardation

-          Basis point

-          Collateralised Debt Obligation (CDO)

-          Credit Default Swap (CDS)

-          Collateralised Loan Obligation (CLO)

-          Commercial Mortgage-Backed Security (CMBS)

-          Collectively Assessed Loan Impairment Provision

-          Commercial Real Estate

-          Conduit

-          Contango

-          Contractual maturity

-          Core Tier 1 capital

-          Core Tier 1 capital ratio

-          Covered bond

-          Commercial Paper (CP)

-          Credit and Liquidity enhancement

-          Credit derivative

-          Credit risk spread (or credit spread)

-          Credit valuation adjustment (CVA)

-          Customer deposit

-          Debt restructuring

-          Derivatives

-          Diversification

-          Dynamic hedging

-          Economic value and economic value added (EVA)

-          Efficient Frontier

-          Embedded equity conversion feature

-          Expected Loss

-          Exposure at Default

-          First or Second Lien

-          Hedging

-          Impaired loan

-          Impairment allowance

-          Impairment loss and impairment provisions

-          Investment grade

-          Loss given default (LGD)

-          Loan to deposit ratio

-          Loan past due

-          Loan-to-value ratio (LTV)

-          Mortgage-backed security (MBS)

-          Markets in Financial Instruments Directive (MiFID)

-          Monoline insurer

-          Monte Carlo simulation

-          Mortgage vintage

-          Multilateral trading facility (MTF)

-          Medium Term Note (MTN)

-          Negative basis bond

-          Negative Equity Mortgage

-          Net Interest Income

-          Over-the-counter (OTC) derivative

-          ERM Glossary: Organised trading facility (OTF)

-          Prime Mortgage

-          Packaged retail investment product (PRIP)

-          Private equity

-          Probability of default (PD)

-          Reinsurance

-          Renegotiated loan

-          Repurchase agreement (repo)

-          Residential Mortgage-Backed Security (RMBS)

-          Risk discount rate

-          Risk-weighted assets

-          Swap execution facility (SEF)

-          Systematic internaliser (SI)

-          Special purpose vehicle (SPV) or special purpose entity (SPE)

-          Sub-investment grade

-          Subordinated liabilities

-          Sub-Prime Mortgage

-          Synthetic CDO

-          Tier 1 capital

-          Tier 1 capital ratio

-          Tier 2 capital

-          Undertakings for Collective Investment in Transferable Securities (UCITS)

-          Wrapped loan or bond

-          Write Down

 

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