Stock Market :
The market in which shares are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance.
This market can be split into two main sections: the primary and secondary market. The primary market is where new issues are first offered, with any subsequent trading going on in the secondary market
Wednesday, July 20, 2011
GILT:
A bond issued by the UK government. Gilts are the UK equivalent of a U.S. Treasury securities. The name "gilt" comes from the original British government certifications that had gilded edges.
The gilt market is essentially comprised of two different types of securities - conventional gilts and index-linked gilts – which between them account for around 99% of gilts in issue.
Conventional gilts are the simplest form of government bond and constitute the largest share of liabilities in the Government's portfolio. A conventional gilt is a liability of the Government which guarantees to pay the holder of the gilt a fixed cash payment (coupon) every six months until the maturity date, at which point the holder receives the final coupon payment and the return of the principal. The prices of conventional gilts are quoted in terms of £100 nominal. However, they can be traded in units as small as a penny.
Index-linked gilts differ from conventional gilts in that the semi-annual coupon payments and the principal are adjusted in line with the UK Retail Prices Index (RPI). This means that both the coupons and the principal paid on redemption of these gilts are adjusted to take account of accrued inflation since the gilt was first issued. For index-linked gilts whose first issue date is before July 2002, the Bank of England performs the function of calculating and publishing the uplifted coupons on each index-linked gilt following the release of the RPI figure which is relevant to it, while for index-linked gilts first issued from July 2002 onwards the DMO performs this function.
Each coupon payable on index-linked gilts consists of two elements:
half the annual real coupon. The real coupon is quoted in the gilt's title and is fixed (e.g. 2½% Index-linked Treasury Stock 2016 pays a real coupon of 2½%, 1¼% twice a year);
an adjustment factor applied to the real coupon payment to take account of the increase in the RPI since the gilt's issue.
The gilt market is essentially comprised of two different types of securities - conventional gilts and index-linked gilts – which between them account for around 99% of gilts in issue.
Conventional gilts are the simplest form of government bond and constitute the largest share of liabilities in the Government's portfolio. A conventional gilt is a liability of the Government which guarantees to pay the holder of the gilt a fixed cash payment (coupon) every six months until the maturity date, at which point the holder receives the final coupon payment and the return of the principal. The prices of conventional gilts are quoted in terms of £100 nominal. However, they can be traded in units as small as a penny.
Index-linked gilts differ from conventional gilts in that the semi-annual coupon payments and the principal are adjusted in line with the UK Retail Prices Index (RPI). This means that both the coupons and the principal paid on redemption of these gilts are adjusted to take account of accrued inflation since the gilt was first issued. For index-linked gilts whose first issue date is before July 2002, the Bank of England performs the function of calculating and publishing the uplifted coupons on each index-linked gilt following the release of the RPI figure which is relevant to it, while for index-linked gilts first issued from July 2002 onwards the DMO performs this function.
Each coupon payable on index-linked gilts consists of two elements:
half the annual real coupon. The real coupon is quoted in the gilt's title and is fixed (e.g. 2½% Index-linked Treasury Stock 2016 pays a real coupon of 2½%, 1¼% twice a year);
an adjustment factor applied to the real coupon payment to take account of the increase in the RPI since the gilt's issue.
Claim Clerk/Claim Representative -banking term
Claim Clerk/Claim Representative Roles involved in Claims Settlement:
• Claim Clerk/Claim Representative
• Claim Adjustor
• Claim Examiner
• Claim Appraiser
• Investigator
Claim Clerk/Claim Representative:
1. Claim representative collects information regarding claim. Claim is submitted for approval.
2. Claim representative checks data for completeness.
• Claim Clerk/Claim Representative
• Claim Adjustor
• Claim Examiner
• Claim Appraiser
• Investigator
Claim Clerk/Claim Representative:
1. Claim representative collects information regarding claim. Claim is submitted for approval.
2. Claim representative checks data for completeness.
Tuesday, June 22, 2010
Prime Mortgage
Prime Mortgage
· A type of mortgage with a low risk of defaulting on the loan and are offered to borrowers with good credit records and a monthly income at least three to four times greater than their monthly housing expenses-mortgage payments plus taxes and other debt payments.
· It is a high-quality mortgage that meets the standards set by Fannie Mae and Freddie Mac and is eligible for purchase or securitization in the secondary mortgage market.
· Prime mortgages are less costly to borrowers and put banks at a lower risk of non-payment.
· Prime loans are much less likely to have a prepayment penalties.
· It is more difficult for home buyers to get approved for prime mortgages, especially if they have minimal income and/or a mediocre credit history.
· Borrowers with problematic credit records more frequently accept mortgages with terms that are not favorable to them, because they aren’t able to qualify for prime loans.
· Prime mortgage also referred as conventional mortgage . The conventional mortgage gets its name because it is the most common form of financing the purchase of a house and is “conventional”, i.e. not insured or guaranteed by the HUD, Veterans’ Administration or the Federal Housing Agency (FHA).
· A Prime mortgage usually does not go over the appraised worth or purchase price of the property by 75%, whichever is the least of the two. It is also the norm for a Prime mortgage to be a long term loan of thirty years since buying a home is considered a lifetime investment.
· A type of mortgage with a low risk of defaulting on the loan and are offered to borrowers with good credit records and a monthly income at least three to four times greater than their monthly housing expenses-mortgage payments plus taxes and other debt payments.
· It is a high-quality mortgage that meets the standards set by Fannie Mae and Freddie Mac and is eligible for purchase or securitization in the secondary mortgage market.
· Prime mortgages are less costly to borrowers and put banks at a lower risk of non-payment.
· Prime loans are much less likely to have a prepayment penalties.
· It is more difficult for home buyers to get approved for prime mortgages, especially if they have minimal income and/or a mediocre credit history.
· Borrowers with problematic credit records more frequently accept mortgages with terms that are not favorable to them, because they aren’t able to qualify for prime loans.
· Prime mortgage also referred as conventional mortgage . The conventional mortgage gets its name because it is the most common form of financing the purchase of a house and is “conventional”, i.e. not insured or guaranteed by the HUD, Veterans’ Administration or the Federal Housing Agency (FHA).
· A Prime mortgage usually does not go over the appraised worth or purchase price of the property by 75%, whichever is the least of the two. It is also the norm for a Prime mortgage to be a long term loan of thirty years since buying a home is considered a lifetime investment.
BANK FOR INTERNATIONAL SETTLEMENTS - BIS
Term
BANK FOR INTERNATIONAL SETTLEMENTS - BIS
Meaning
The Bank for International Settlements (BIS) is an international organization which fosters international monetary and financial cooperation and serves as a bank for central banks.
The BIS fulfils this mandate by acting as:
· a forum to promote discussion and policy analysis among central banks and within the international financial community
· a centre for economic and monetary research
· a prime counterparty for central banks in their financial transactions
· agent or trustee in connection with international financial operations
The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People's Republic of China and in Mexico City.
Established on 17 May 1930, the BIS is the world's oldest international financial organization. Essentially, the BIS is a central bank for central banks; it does not provide financial services to individuals or corporations.
As its customers are central banks and international organizations, the BIS does not accept deposits from, or provide financial services to, private individuals or corporate entities. The BIS strongly advises caution against fraudulent schemes.
BANK FOR INTERNATIONAL SETTLEMENTS - BIS
Meaning
The Bank for International Settlements (BIS) is an international organization which fosters international monetary and financial cooperation and serves as a bank for central banks.
The BIS fulfils this mandate by acting as:
· a forum to promote discussion and policy analysis among central banks and within the international financial community
· a centre for economic and monetary research
· a prime counterparty for central banks in their financial transactions
· agent or trustee in connection with international financial operations
The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People's Republic of China and in Mexico City.
Established on 17 May 1930, the BIS is the world's oldest international financial organization. Essentially, the BIS is a central bank for central banks; it does not provide financial services to individuals or corporations.
As its customers are central banks and international organizations, the BIS does not accept deposits from, or provide financial services to, private individuals or corporate entities. The BIS strongly advises caution against fraudulent schemes.
Subprime Mortgage
Subprime Mortgage
· Subprime mortgage market lends money to people who don’t meet the credit or documentation standards for ordinary mortgages or who has poor credit history.
· Subprime borrowers often have credit problems or low incomes, there’s a greater chance that they won’t pay back their debts, making subprime mortgages inherently risky for lenders. To compensate for this added risk, banks and other lenders charge higher interest rates on subprime mortgages.
· Subprime mortgages are considered less borrower-friendly and put banks at higher risk of non-payment.
· The subprime rate offered by the lender can vary from lending institution to institution.
· Subprime mortgages are more frequently adjustable rate (ARM) than fixed, the Federal Reserve web site states that over 2/3rds of such loans are adjustable. This increases the possibility that borrowers will be incapable of paying the differences if interest rates undergo an unexpected increase.
· Subprime mortgage market lends money to people who don’t meet the credit or documentation standards for ordinary mortgages or who has poor credit history.
· Subprime borrowers often have credit problems or low incomes, there’s a greater chance that they won’t pay back their debts, making subprime mortgages inherently risky for lenders. To compensate for this added risk, banks and other lenders charge higher interest rates on subprime mortgages.
· Subprime mortgages are considered less borrower-friendly and put banks at higher risk of non-payment.
· The subprime rate offered by the lender can vary from lending institution to institution.
· Subprime mortgages are more frequently adjustable rate (ARM) than fixed, the Federal Reserve web site states that over 2/3rds of such loans are adjustable. This increases the possibility that borrowers will be incapable of paying the differences if interest rates undergo an unexpected increase.
SOVEREIGN DEBT
Term
SOVEREIGN DEBT
Meaning
A debt instrument guaranteed by a government.
Under the doctrine of sovereign immunity, the repayment of sovereign debt cannot be forced by the creditors and it is thus subject to compulsory rescheduling, interest rate reduction, or even repudiation. The only protection available to the creditors is threat of the loss of credibility and lowering of the international standing (the sovereign debt rating) of the country which may make it much more difficult to borrow in the future.
Example
In early 2010 fears of a sovereign debt crisis or the 2010 Euro Crisis developed concerning some countries in Europe including: Greece, Ireland, Spain, and Portugal. This led to a crisis of confidence as well as the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.
Concern about rising government deficits and debt levels across the globe together with a wave of downgrading of European Government debt has created alarm in financial markets. The debt crisis has been mostly centred around recent events in Greece, where there is concern about the rising cost of financing government debt. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed to a €110 billion loan for Greece, conditional on the implementation of harsh Greek austerity measures. On 9 May 2010, Europe's Finance Ministers approved a comprehensive rescue package worth almost a trillion dollars aimed at ensuring financial stability across Europe.
SOVEREIGN DEBT
Meaning
A debt instrument guaranteed by a government.
Under the doctrine of sovereign immunity, the repayment of sovereign debt cannot be forced by the creditors and it is thus subject to compulsory rescheduling, interest rate reduction, or even repudiation. The only protection available to the creditors is threat of the loss of credibility and lowering of the international standing (the sovereign debt rating) of the country which may make it much more difficult to borrow in the future.
Example
In early 2010 fears of a sovereign debt crisis or the 2010 Euro Crisis developed concerning some countries in Europe including: Greece, Ireland, Spain, and Portugal. This led to a crisis of confidence as well as the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.
Concern about rising government deficits and debt levels across the globe together with a wave of downgrading of European Government debt has created alarm in financial markets. The debt crisis has been mostly centred around recent events in Greece, where there is concern about the rising cost of financing government debt. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed to a €110 billion loan for Greece, conditional on the implementation of harsh Greek austerity measures. On 9 May 2010, Europe's Finance Ministers approved a comprehensive rescue package worth almost a trillion dollars aimed at ensuring financial stability across Europe.
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