Finance and Banking

KANGAROO BONDS To KRONA (Finance and Banking)

KANGAROO BONDS Australian dollar-denominated bonds issued within Australia by a foreign firm. KEEFE’S DOMESTIC AND FOREIGN BANK RATINGS Keefe BankWatch ratings are based upon a quantitative analysis of all segments of the organization including, where applicable, holding company, member banks or associations, and other subsidiaries. Keefe BankWatch assigns only one rating to each company, based […]

JAPANESE TERM To J-CURVE EFFECT (Finance and Banking)

JAPANESE TERM A Japanese yen rate of one U.S. dollar, generally known as European terms. A Japanese yen quote of ¥105.65/$ is called Japanese terms. J-CURVE EFFECT Devaluation is conventionally believed to be a tool of improving a nation’s trade deficit. It is believed that it takes time for an exchange rate change to affect […]

MAASTRICHT TREATY To MULTILATERAL NETTING (Finance and Banking)

MAASTRICHT TREATY Treaty agreed to in 1991 and ratified in mid-1993 that committed the 12 member-states of the European Community to a closer economic and political union. MAINTENANCE MARGIN Maintenance margin is the minimum amount of equity that investors must carry in their margin account at all times. It is used to protect the brokerage […]

NEAR MONEY To NOTE ISSUANCE FACILITY (Finance and Banking)

NEAR MONEY Liquid assets easily convertible into money as needed such as marketable securities, money-market funds, and time deposits. NEGOTIABLE INSTRUMENT Any financial instrument that can readily be converted into cash. It is a written draft or promissory note, which is signed by the maker or drawer, has an unconditional promise, and is an order […]

OFFER To OVERSEAS PRIVATE INVESTMENT CORPORATION (Finance and Banking)

OFFER Also called ask or sell, the rate at which a trader is willing to sell a foreign currency or other securities. OFFICIAL RESERVE TRANSACTIONS BALANCE The official reserve transaction balance shows an adjustment to be made in official reserves for the balance of payments to balance. OFFICIAL SETTLEMENTS BALANCE Also called overall balance or […]

PARALLEL MARKETS To PUT (Finance and Banking)

PARALLEL MARKETS A government-tolerated alternative to the official foreign exchange market, such as a black market. Some countries unofficially acknowledge the benefits of such a market by allowing the market to exist openly. PARITY CONDITIONS More exactly called international exchange rate parity conditions, parity conditions are fundamental economic relationships that help to explain exchange rate […]

QUANTO To QUOTATION (Finance and Banking)

QUANTO An option in which the foreign exchange risk in the underlying asset has been removed. QUOTATION Also called, quote. 1. The highest bid to buy and the lowest offer (ask) to sell a security in a particular market at a given time. For example, a quotation on a stock, say “40 1/4 to 40 […]

RAND To RUPIAH (Finance and Banking)

RAND Monetary unit of Lesotho, South Africa, and South West Africa. REAL COST OF HEDGING The real cost of hedging is the extra cost of hedging as opposed to not hedging. A negative real cost would signify that hedging was more favorable than not hedging. REAL EXCHANGE RATE In contrast to nominal exchange rate, the […]

SAMURAI BONDS To SYSTEMATIC RISK (Finance and Banking)

SAMURAI BONDS Yen-denominated bonds issued in Japan by a foreign borrower. This contrasts with Shogun bonds. SCHILLING Austria’s currency. SCRIPTURAL MONEY The form in which the euro can be used during the transition period—before it is available in notes and coins. It includes all forms of noncash money such as checks, money orders, credit cards, […]

TARGET-ZONE ARRANGEMENT To TYPES OF OVERSEAS BANKING SERVICES (Finance and Banking)

TARGET-ZONE ARRANGEMENT Target-zone arrangement is an international monetary arrangement in which countries vow to maintain their exchange rates within a specific band around agreed-upon, fixed, central exchange rates. TAX ARBITRAGE Tax arbitrage is a form of arbitrage that involves the shifting of gains or losses from one tax authority to another to profit from tax […]