Banking and Finance Flashcards
what are credit unions?
cooperative initiatives with depositors being shareholders
what is crowdfunding?
raising funds from the general public who make financial pledges
what are microcredits?
very small loans for borrowers who lack collateral
how did banking start?
in China (flying cash = gov certificates to pay distant merchants) Knights templar is euroope
where does the word bank come from?
italian ‘banco’ (bench)
why are banks considered as risk managers?
the risk is a loan will not be repaid
why is the risk involved in banking calculated?
bc banks are fully aware of the potential default
what triggered the 2008 GFC?
bankers accepted subprime mortgages; deregulation; unregulated use of derivatives
how did govs help banks during GFC?
they bailed them out with bail-out packages
what do modern banks do? (4)
- receive deposits
- ensure withdrawals
- give loans
- offer financial services
how to banks make money? (4)
charge interest
charge fees and comission
invest deposits
deal with diff financial products
what are the three types of banks?
central banks (central banking) commercial banks (retail banking) = high street banks investment banks (wholesale banking) = merchant banks
translate the three types of banks
centralno bančništvo
poslovanje s strankami / občani
bančni posli za podjetja
what do central banks do? (5)
- control inflation and money supply
- set minimum interest rate
- maintain financial stability
- implement monetary policy
- act as lenders to other banks
what do commercial banks do? (6)
- manage customer accounts
- receive and hold deposits
- offer loans
- issue credit and debit cards
- pay standing orders
- provide atms and foreign exchange
what do investment banks do? (4)
- give advice on corporate finance
- arrange M & A
- issue and underwrite securities
- finance international trade
what is a universal bank?
commercial + investment bank
what does ‘issue and underwrite securities’ mean?
determine the risk and the price of a security
what is ECB and where is it HQed?
the European Central Bank
Frankfurt
how is the US central bank called?
The Federal Reserve (the Fed)
how is the UK central bank called?
The Bank of England / Scotland
how is the Slovenian central bank called?
The Bank of Slovenia or The Slovenian Central Bank
tr overdraft
limit, dovoljena prekoračitev stanja na računu
def lender of the last resort
a creditor to other banks when there is none other availabile
def current account
a way for a customer to deposit money and take it out without restrictions
def overdraft
an arrangement that allows the customer to overdraw their account at a relatively high interest rate
def savings account
= deposit account
intended to keep money for a longer period of time
def time (notice) deposit
an arrangement to leave money in your savings account for an agreed period of time
def credit crunch
a situation where there is not enough credit available for all companies
def austerity measures
strict economic policies implemented by a government to reduce government spending and public debt
def stockbroking
buying and selling stocks and bonds for clients
def shares
equal units of ownership in a company
def collateral
debt guarantee
def installments
monthly payments of loans
what does every bank need?
reserves
tr standing order
trajnik
what does ATM mean?
automatic teller machine
def and tr deregulation
opposite of gov control
odprava državnega nadzora
tr austerity measures
varčevalni ukrepi
