Industry WIKI

A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. The loan may be offered at the lender's standard variable rate/base rate. There may be a direct and legally defined link to the underlying inde

Annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (EAPR), is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc. It is a finance charge expressed as an annual rate. Those terms have formal, legal definitions in some countries or legal j

An asset-backed commercial paper program (ABCP program, ABCP conduit, or simply conduit) is a type of non-bank financial entity that issues short-term debt, known as asset-backed commercial paper (ABCP), to fund medium- to long-term assets. These programs act like banks by providing liquidity and transforming maturities—borrowing short-term to finance longer-term investments—but operate

Asset-based lending is any kind of lending secured by an asset. This means, if the loan is not repaid, the asset is taken. In this sense, a mortgage is an example of an asset-based loan. More commonly however, the phrase is used to describe lending to business and large corporations using assets not normally used in other loans. Typically, the different types of asset-based loans include

In finance, an asset–liability mismatch occurs when the financial terms of an institution's assets and liabilities do not correspond. Several types of mismatches are possible. An asset-liability mismatch presents a material risk at institutions with significant debt exposure, such as banks or sovereign governments. A significant mismatch may lead to insolvency or illiquidity, which can c

Automated cash handling is the process of dispensing, counting and tracking cash in a bank, retail, check cashing, payday loan / advance, casino or other business environment through specially designed hardware and software for the purposes of loss prevention, theft deterrence and reducing management time for oversight of cash drawer an unable operations.

A bank is a financial institution that accepts deposits from the public and creates a demand deposit while making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.

A bank account is a financial account maintained by a bank or other financial institution in which the financial transactions between the bank and a customer are recorded. Each financial institution sets the terms and conditions for each type of account it offers, which are classified in commonly understood types, such as deposit accounts, credit card accounts, current accounts, loan ac

A bank examiner is a financial professional who has the task of making sure that banks and savings and loan associations are operating legally and safely, in accordance with the bank regulations imposed on these institutions by the chartering level of government. In the United States, they may conduct supervision on behalf of a U.S. government agency, the Federal Reserve System, a state

Banking as a service (BaaS) is the provision of banking products (such as deposit accounts, loans and credit cards) to customers through non-bank or non-financial third party partnerships. The bank provides the balance sheet management, including capital, liquidity and credit risk management, while the partner company (typically a fintech) interacts directly with the customer via their p

Banking software refers to computer systems used by financial institutions to manage and deliver banking services. These systems support functions such as account management, transaction processing, record keeping, and customer interactions across various channels. Banking software may include core baking systems as well as applications for online, mobile, and automated services. Its

The bond market (also debt market or credit market) is a financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills, and so on for public and private expenditures. The bond market has largely been dominated by the United States

In finance, a bull is a speculator in a stock market who buys a holding in a stock in the expectation that, in the very short-term, it will rise in value, whereupon they will sell the stock to make a quick profit on the transaction. Strictly speaking, the term applies to speculators who borrow money to fund such a purchase, and are thus under great pressure to complete the transaction be

Credit market imperfections (known academically as capital market imperfections) are limitations that reduce the range of financial contracts that can be signed or honored. There are three main theoretical drivers of imperfection: First, lenders do not have full information about the borrower, whether they have the capacity to pay back their debt and/or whether they are willing to pay (a

Cash out refinancing (in the case of real property) occurs when a loan is taken out on property already owned in an amount above the cost of transaction, payoff of existing liens, and related expenses. Strictly speaking, all refinancing of debt is "cash-out," when funds retrieved are utilized for anything other than repaying an existing loan.

Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. A CLO is a type of collateralized debt obligation, or CDO.

A commercial mortgage is a mortgage loan secured by commercial property, such as an office building, shopping center, industrial warehouse, or apartment complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.

The Committee on Capital Markets Regulation is an independent and nonpartisan 501(c)(3) research organization financed by contributions from individuals, foundations, and corporations.

A concession or concession agreement is a grant of rights, land, property, or facility by a government, local authority, corporation, individual or other legal entity.

In real estate, creative financing is non-traditional or uncommon means of buying land or property. The goal of creative financing is generally to purchase, or finance a property, with the buyer/investor using as little of his own money as possible, otherwise known as leveraging. Using these techniques an investor may be able to purchase multiple properties using little, or none, of his

In finance, a credit derivative refers to any one of "various instruments and techniques designed to separate and then transfer the credit risk" or the risk of an event of default of a corporate or sovereign borrower, transferring it to an entity other than the lender or debtholder.

A debt buyer is a company, sometimes a collection agency, a private debt collection law firm, or a private investor, that purchases delinquent or charged-off debts from a creditor or lender for a percentage of the face value of the debt based on the potential collectibility of the accounts. The debt buyer can then collect on its own, utilize the services of a third-party collection agenc

In finance, a derivative is a contract between a buyer and a seller. The derivative can take various forms, depending on the transaction, but every derivative has the following four elements:

The Diamond–Dybvig model is an influential model of bank runs and related financial crises. The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any time) may give rise to self-fulfilling panics among depositors. Douglas Diamond and Philip H. Dybvig, along with Ben Bernanke, were the recipients o

A direct debit or direct withdrawal is a mandated financial transaction whereby a payer authorizes a payee to draw varying recurring amounts directly from the payer's bank account, commonly used for billing utilities, loans, and subscriptions. Formally, the organisation that calls for the funds ("the payee") instructs their bank to collect (i.e., debit) an amount directly from another's

In finance and accounting, and particularly in asset and liability management (ALM), the duration gap measures how well matched are the timings of cash inflows (from assets) and cash outflows (from liabilities), and is then one of the primary asset–liability mismatches considered in the ALM process.

European DataWarehouse (EDW) is a Securitisation Repository designated by both the European Securities and Markets Authority (ESMA) and the Financial Conduct Authority (FCA). European DataWarehouse GmbH is part of the ABS Loan Level Data initiative established by the European Central Bank that is engaged in providing data warehousing services and full disclosure for investors in asset-ba

The federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds

Financial inclusion is the availability and equality of opportunities to access financial services. It refers to processes by which individuals and businesses can access appropriate, affordable, and timely financial products and services—which include banking, loan, equity, and insurance products. It provides paths to enhance inclusiveness in economic growth by enabling the unbanked po

A financial instrument is a monetary contract between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt (bonds, loans); equity (shares); or derivatives (options, futures, forwards).

A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A financial transaction always involves one or more financial asset, most commonly money or another valuable item such as gold or silver.

The forex scandal (also known as the forex probe) is a 2013 financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates on the forex market for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $4.7 trillion per day fo

Fractional-reserve banking is the system of banking under which banks that take deposits from the public keep only part of their deposit liabilities in liquid assets as a reserve, and lend a percentage to borrowers, thus increasing the money supply by the loaned amount. Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank. Fractional-reserv

The Fund Transfer Pricing (FTP) measures the contribution by each source of funding to the overall profitability in a financial institution. Funds that go toward lending products are charged to asset-generating businesses whereas funds generated by deposit and other funding products are credited to liability-generating businesses.

GreenSky, LLC is an American financial technology company. Founded in 2006 and based in Atlanta, Georgia, it provides technology to banks and merchants to provide loans in the home improvement, solar, and healthcare sectors.

The term in kind (or in-kind) generally refers to goods, services, and transactions not involving money or not measured in monetary terms. It is a part of many spheres, mainly economics, finance, but also politics, work career, food, health and others. There are many different types of in kind actions throughout the mentioned branches, which can be identified and distinguished.

The interbank lending market is a market in which banks lend funds to one another for a specified term. Most interbank loans are for maturities of one week or less, the majority being overnight. Such loans are made at the interbank rate (also called the overnight rate if the term of the loan is overnight). A sharp decline in transaction volume in this market was a major contributing fac

In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct from a fee which the borrower may pay to the lender or some third party. It is also distinct from dividend which is paid by a company to its share

In finance, an interest rate cap is a type of interest rate derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for each month the LIBOR rate exceeds 2.5%.

An interest-free economy or interest free economy is an economy that does not have pure interest rates.

An intermediary, also known as a middleman or go-between, is defined in various ways, according to context. In law or diplomacy, an intermediary is a third party who offers intermediation services between two parties. In trade or barter, an intermediary acts as a conduit for goods or services offered by a supplier to a consumer, which may include wholesalers, resellers, brokers, and vari

Lender option borrower option or lender's option borrower's option (LOBO) is a long term borrowing instrument available in the United Kingdom. They involve periodic interest re-fixings, which incorporates two linked options:

A loan shark is a person who offers loans at interest rates that are extremely high or illegal, has strict terms of collection, and generally operates outside the law, often using the threat of violence or other illegal, aggressive, and extortionate actions when seeking to enforce the satisfaction of the debt. As a consistent or repeated illegal business operation or "racket", loan shark

Microcredit is the extension of very small loans (microloans) to borrowers with limited access to traditional credit who typically do not have access to traditional banking services due to a lack of collateral, steady employment, and a verifiable credit history. The primary aim of microcredit is to support entrepreneurship, facilitate self-employment, and alleviate poverty, particularly

Monetary hegemony is an economic and political concept in which a single state has decisive influence over the functions of the international monetary system. A monetary hegemon would need:

In the United States, a mortgage note (also known as a real estate lien note or borrower's note) is a promissory note secured by a specified mortgage loan.

In the mortgage industry of the United States, mortgage servicing rights (MSR) are the contractual rights to service a mortgage after the mortgage origination process is complete. Mortgage servicing is the management of the repayment of mortgage debt on behalf of the lender, including the collection and recording of mortgage payments. The legal entity that holds the mortgage servicing ri

Narrow banking is a banking system that restricts commercial banks to hold only safe and liquid assets, like government bonds, against customer deposits, while prohibiting traditional lending activities. Under this model, banks function as custodians and payment processors, separate from the lending function performed by other financial intermediaries. The concept emerged as a response t

The overnight market is the component of the money market involving the shortest term loan. The overnight market is primarily used by banks and other financial institutions. Lenders agree to lend borrowers funds only "overnight", i.e., the borrower must repay the borrowed funds plus interest at the start of business the next day. Given the short period of the loan, the interest rate cha

In finance, partial return reverse swap (PRRS) is a type of derivative swap, a financial contract that transfers a percentage of both the credit risk and market risk of an underlying asset, usually half, while also transferring all of the ownership liabilities for estate planning, tax purposes, and insider trading rules.

Peer-to-peer investing (P2PI) is the practice of investing money in notes issued by borrowers who are requesting a loan without going through a traditional financial intermediary and who are unknown to the investor. P2PI is not to be confused with Peer-to-peer lending (P2PL) which deals with the borrower's part. Investing takes place online via a peer-to-peer lending/investing company. T

The Pfandbrief (plural: Pfandbriefe), a mostly triple-A rated German bank debenture, has become the blueprint of many covered bond models in Europe and beyond. The Pfandbrief is collateralized by long-term assets such as property mortgages or public sector loans as stipulated in the Pfandbrief Act. Total volume outstanding in Pfandbriefe was EUR 806 billion as at end-2008. Pfandbrief bon

Predatory lending refers to unethical practices conducted by lending organizations during a loan origination process that are unfair, deceptive, or fraudulent. While there are no internationally agreed legal definitions for predatory lending, a 2006 audit report from the office of inspector general of the US Federal Deposit Insurance Corporation (FDIC) broadly defines predatory lending a

On March 17, 2008, in response to the subprime mortgage crisis and the collapse of Bear Stearns, the Federal Reserve announced the creation of a new lending facility, the Primary Dealer Credit Facility (PDCF). Eligible borrowers include all financial institutions listed as primary dealers, and the term of the loan is a repurchase agreement, or "repo" loan, whereby the broker dealer sells

The prime rate or prime lending rate is an interest rate used by banks, typically representing the rate at which they lend to their most creditworthy customers. Some variable interest rates may be expressed as a percentage above or below prime rate.

A promissory note, sometimes referred to as a note payable, is a financial instrument in which one party (the maker or issuer) promises in writing to pay a determinate sum of money to another (the payee), subject to any terms and conditions specified within the document.

The real bills doctrine says that as long as bankers lend to businessmen only against the security (collateral) of short-term 30-, 60-, or 90-day commercial paper representing claims to real goods in the process of production, the loans will be just sufficient to finance the production of goods. The doctrine seeks to have real output determine its own means of purchase without affecting

A renewable energy derivative is based on a new method of securitization, which is a structured finance process that pools and repackages cash-flow-producing financial assets into securities which are then sold to investors. The term "securitization" is derived from the fact that securities are used to obtain funds from investors.

In finance, securities lending or stock lending refers to the lending of securities by one party to another.

Securitization is the financial practice of pooling contractual debt obligations (such as residential mortgages, commercial mortgages, auto loans, or credit card debt) and selling their associated cash flows to investors. The financial instruments sold in such transactions are known as securities, types of which include bonds, pass-through securities, and collateralized debt obligations

SOFR Academy, Inc. is an American financial market infrastructure company focused on developing benchmark credit-spread infrastructure designed to complement risk-free reference rates in global capital markets. In connection with global reference rate reform and the transition away from the London Interbank Offered Rate (LIBOR), which underpinned approximately US$400 trillion in financia

In finance, valuation is the process of determining the value of a (potential) investment, asset, or security.

A zombie bank is a financial institution that has an economic net worth of less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support.