Bank failures and rescues/Related Articles

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A list of Citizendium articles, and planned articles, about Bank failures and rescues.
See also changes related to Bank failures and rescues, or pages that link to Bank failures and rescues or to this page or whose text contains "Bank failures and rescues".

Index

See the economics index for an index to topics referred to in the economics articles.

Parent Topics

  • Economics [r]: The analysis of the production, distribution, and consumption of goods and services. [e]
  • Financial system [r]: The interactive system of organisations that serve as intermediaries between lenders and borrowers. [e]
  • Financial economics [r]: the economics of investment choices made by individuals and corporations, and their consequences for the economy, . [e]
  • Banking [r]: the system of financial intermediation that provides the principle source of credit to individuals and companies. [e]

Other related articles

Glossary

(For definitions not shown below, see the economics glossary [1])

  • "Bad bank" [r]: A subsidiary, or separate corporation, created to hold and manage non-performing assets transferred to it by a rescued bank. [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]
  • Bill of Exchange [r]: A written order to pay the holder a stated sum of money at a stated date (otherwise known as a "draft", the person who is paid being termed the "drawer"). [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]
  • 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]
  • Commercial paper [r]: unsecured debt_instruments that are issued by corporations to meet short term financing needs (usually repayable after 3 months). [e]
  • Credit easing [r]: A method of making credit more available to individuals and businesses by changing the composition of the assets of the central bank towards less liquid and riskier private sector assets. Unlike quantitative easing, it may be done without expanding the money supply. [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]
  • Draft (finance) [r]: Another name for a bill of exchange (termed "bank draft" if issued by a bank: otherwise "trade draft"). [e]
  • Federal funds rate [r]: The overnight interest rate at which banks lend balances at the Federal Reserve to other banks. [e]
  • Fiat money [r]: money whose value is determined solely by government order, or "fiat" (as distinct from commodity money that has value because of its scarcity or cost of production). [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]: The risk that the value of a fixed-rate security or loan will fall as a result of a rise in interest rates. [e]
  • Leverage [r]: (i) The use of borrowing to increase the amount of money that is available for investment or consumption. (ii) A proportional measure of indebtedness, such as the ratio of a company's debt to its shareholders' equity (the same as British "gearing"), or the ratio of the indebtedness of a household to the net value of its assets (ie net of its debts). [e]
  • LIBOR [r]: (London Interbank Offer Rate) the rate of interest at which a group of banks (16 banks from seven countries, including the United States, Switzerland and Germany) are willing to lend to each other for periods ranging from a day to a year . [e]
  • Liquidity [r]: (i) The quantity of available assets in its possession that an organisation could rapidly exchange for cash (assets that cannot be exchanged for cash at a particular time are considered to be "illiquid" at that time); (ii) the funding that is unconditionally available to settle claims through monetary authorities (termed "official liquidity"). [e]
  • Liquidity risk [r]: the risk that assets cannot be sold at time when cash is needed to meet a commitment. [e]
  • Liquidity trap [r]: a state of the economy in which an expansionary monetary policy has no effect upon output. [e]
  • Margin account [r]: an arrangement that enables customers to buy securities with money borrowed from a broker, subject to a minimum maintenance level related to the market values of the securities. [e]
  • Monetary base [r]: currency in circulation plus bank vault cash plus deposits held by banks at the central bank (termed "high-powered money" in the US, and referred to as M0 in the UK). [e]
  • Money supply [r]: the economy's stock of those assets that can be quickly exchanged for goods and services. [e]
  • Margin call [r]: a demand for the additional securities required to maintain the minimum maintenance level of a margin account when security prices fall. [e]
  • Market risk [r]: The risk that the value of an investment in a financial product will fall as a result of a fall in the market for that product. [e]
  • Monetary base [r]: currency in circulation plus bank vault cash plus deposits held by banks at the central bank (termed "high-powered money" in the US, and referred to as M0 in the UK). [e]
  • Money market [r]: A market for short-term debt instruments (generally of maturity after less than one year) such as certificates of deposit, commercial paper, and Treasury bills. [e]
  • Moral hazard [r]: Motivation to take an otherwise unwarranted risk because the cost of an unfavourable outcome would be borne by someone other than the risk-taker. [e]
  • Open market operation [r]: The buying and selling of government securities in order to influence the level of banking reserves. [e]
  • Prime rate [r]: The interest rate that commercial banks charge for loans involving the lowest risk of default - such as loans to large companies. [e]
  • Qualitative easing [r]: A shift in the composition of the assets of the central bank towards less liquid and riskier assets (in order to reduce credit [[spreads] and improve the functioning of private credit markets) - also known as credit easing. [e]
  • Quantitative easing [r]: An increase in the central bank's monetary liabilities as a result of its purchases of corporate or government securities. [e]
  • Reserves (banking) [r]: A bank's holding of deposits at its central bank plus the currency held in its vaults. [e]
  • Reserve ratio [r]: The ratio of a bank's reserves to its deposits, a minimum value of which is set by its central bank with the effect of limiting the proportion of its deposits that the bank is permitted to lend. [e]
  • Run (banking) [r]: An attempt by a large number of investors to withdraw their deposits. [e]
  • Securitisation [r]: The conversion of a cash flow into a marketable security (usually a claim upon debt repayments) and often categorised according to the expected risk of default (examples include collateralised debt obligations and structured investment vehicles.) [e]
  • Sterilisation, monetary [r]: Action taken by a central bank to counteract changes to its monetary base - for example by buying or selling government securities. [e]
  • Stress test (banking) [r]: a test of the adequacy a bank's capital structure by estimating the consequences for it of an imaginary recession. [e]
  • Structured investment vehicle [r]: (SIV) a fund that borrows money - usually at LIBOR rates - by the issue of asset backed commercial paper and uses it to finance longer term loans at higher interest rates. [e]
  • Value at risk [r]: The maximum possible loss in the value of an asset within a given time span and at a given confidence level. [e]
  • Wholesale banking [r]: transactions other than those with a bank's retail customers, including trading in derivatives and in the interbank markets, stock markets and foreign exchange markets. [e]