Financial instruments, whose yield and redemption are guaranteed by assets of the issuer, exclusively earmarked for the satisfaction of the rights incorporated in the financial instruments themselves.
Leveraged buy-out financing.
Form of remuneration of junior securities deriving from securitisation transactions. In addition to a fixed dividend, such securities accrue periodic earnings (quarterly, semi-annually, etc.), the amount of which is a result of the margin produced by the transaction (in turn reflecting the performance of the securitised assets).
ADR (American Depositary Receipt)
A negotiable certificate issued by a U.S depositary bank evidencing ownership of shares in a non-U.S. company.
ADS (American Depositary Share)
A U.S. dollar denominated form of equity ownership in a non-U.S. company. It represents the foreign shares of the company held on deposit by a custodian bank in the company's home country. While the ADR is a physical certificate evidencing ownership in one or several ADSs, the ADS is the instrument that is actually traded.
Advanced IRB (Internal Rating Based)
Approach to internal ratings within the framework of the new Basel accords, which is distinguished by its basic and advanced methods. The advanced method may be used only by institutions satisfying more stringent requirements compared to the basic approach. In this case, all the estimated input (PD, LGD, EAD and Maturity) used for credit risk assessment is done in-house. Instead, in the basic method the Bank assesses only the PD.
Financial broker assisting government authorities or companies involved in privatisation or other corporate finance transactions, whose tasks range from arranging appraisals to drawing up documents and providing general professional advice about specific transactions.
AGM (Annual General Meeting)
An annual meeting called by the directors of a company that allows shareholders to be informed about, and involved in, company decisions and workings.
ALM - Asset & Liability Management
Integrated management of assets and liabilities designed to allocate the resources with a view to optimising the risk/yield ratio.
Alternative investments cover a broad spectrum, including those in private equity and hedge funds (see definitions below).
Differs from "cost" in that it provides for the progressive amortisation/depreciation of the differential between the book value and nominal value of an asset or liability on the basis of the effective rate of return.
Italian Association of Insurance Companies. Arrangement (commission)
Commission having the nature of compensation for professional advice and assistance at the stage when a loan is co-ordinated and set up.
In the sector of structured finance, the arranger is the figure who - albeit in different forms and with different titles (mandated lead arranger, joint lead arranger, sole arranger, etc.) - acts as a co-ordinator of the organisational aspects of the transaction.
Choice of markets, geographical areas, sectors and products to invest in.
Activities in connection with the management and administration of the assets of the clientele in different ways.
Italian Association for asset management companies.
Italian Association of Financial Placement and Investment Companies.
In quoted companies, it is overall checking on the business and bookkeeping of a company, performed by both in-house staff (internal audit) and independent audit firms (external audit).
The unit of a bank or holding company that takes care of handling all transactions performed by the operational units (front office).
Retrospective analysis performed to verify the reliability of the measurement of risk sources associated with different asset portfolios.
Italian central bank, founded in 1893.
Offer of insurance products through the operating network of the bank.
Usually concerns securities or financial instruments in general, identifying the portion of a portfolio dedicated to "proprietary" trading.
Board founded in 1993 and promoted by the Italian Bankers' Association to settle controversies between banks and customers for values not exceeding 10,000 euro and for which no solution was found at the bank's complaint offices.
Committee of the International Regulations Bank and the G10 Nations, responsible for guaranteeing the international stability of the banking system, the safety of depositors, banks, shareholders and the whole economy, and for setting univocal rules for all banks.
The new Basel Capital Accord lays down new guidelines for determining the minimum solvency requirements for banks. The main change in these guidelines is a new system for weighting the risks run by banks in their loans to retail and corporate customers. The objective of Basel 2 is to improve the soundness of the financial system.
Measure used to define the variations in return, prices, market prices, etc. One basis point or bp equals one hundredth of a percent (0.01%).
Contract providing for the exchange between opposite parties of variable-rate payments linked to a different index.
Any market in which prices exhibit a declining trend. The opposite of bull market.
Objective parameter of financial investment which can also be represented by the most well known indexes (MIB30, Dow Jones, etc.) or by other indexes considered representative of the investment's risk/performance profile.
It generally identifies behaviour commensurate with state-of-the-art skills and techniques in a given technical/professional area.
The difference between the bidding price and asking price of a given financial instrument or set of financial instruments.
Colloquial name for any of the ordinary shares in the most highly regarded companies traded on a stock market. Blue-chip companies have a well-known name, a good growth record, and large assets. Blue-chip companies are reputed to be reliable investments.
A certificate of debt issued by governments and companies as a means of raising capital which entitles the holder to a fixed-rate of interest and is repayable, with or without security, on a specified maturity date.
See Lead manager
The Italian stock exchange.
An individual or firm which acts as an intermediary between a buyer and seller, usually charging a commission.
Forecast of cost and income trends of a firm in some future period.
Any market in which prices are in an upward trend. The opposite of bear market.
A recommendation by an analyst or advisor that a given security should be bought. Opposite of sell.