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What Does 1913 Federal Reserve Act Mean? The 1913 U.S. legislation that created the current Federal Reserve System. The Federal Reserve Act intended to establish a form of economic stability through the introduction of the Central Bank, which would be in charge of monetary policy, into the United States. The Federal Reserve Act is perhaps one of the most influential laws concerning the U.S. financial system.
Investopedia explains 1913 Federal Reserve Act Prior to 1913, panics were common occurrences, as investors were unsure about the safety of their deposits. The Federal Reserve Act gave the 12 Federal Reserve banks the ability to print money in order to ensure economic stability. In addition to this task, the Fed had the power to adjust the discount rate/the fed funds rate and buy & sell U.S. treasuries.
What Does 3-6-3 Rule Mean? Slang used to refer to an "unofficial rule" under which the banking industry once operated, which alludes to it being noncompetitive and simplistic. The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors.
Investopedia explains 3-6-3 Rule Many attribute the problems faced by the banking industry during the events that lead up to the Great Depression as reasons why the government implemented tighter banking regulations. These regulations controlled the rates at which banks can lend and borrow money. Unfortunately, the regulations made it difficult for banks to compete with each other and the banking industry became stagnant. However, with the loosening of banking regulations and the widespread adoption of information technology such as the internet, banks now operate in a much more
competitive and complex manner. For example, banks are now providing insurance, brokerage and other forms of financial services.
ABA Bank Index
What Does ABA Bank Index Mean? A banking index that is made up of community banks and banking institutions. This index was created to represent the smaller institutions of the banking industry and stands in contrast to the KBW Banking Index in that respect. The ABA index trades on the Nasdaq under the symbol ABAQ.
Investopedia explains ABA Bank Index The ABAQ Index is weighted according to market value. The index was created in 2003 in an effort to publicize the community banking industry and is computed for both total and price return. The ABAQ is also designed to aid in improved market liquidity and more equitable market valuations.
ABA Transit Number
What Does ABA Transit Number Mean? A unique number assigned by the American Bankers Association (ABA) that identifies a specific federal or state chartered bank or savings institution. In order to qualify for an ABA transit number, the financial institution must be eligible to hold an account at a Federal Reserve bank. ABA transit numbers are also known as ABA routing numbers, and are used to identify which bank will facilitate the payment of the check.
Investopedia explains ABA Transit Number The ABA Transit number was originally developed in 1910 to indicate check processing endpoints. Since then, the number's use has increased to include participants in check clearing between banking institutions, automated clearing houses and online banking activities. The ABA check routing number is usually the first nine digits in the bottom row of
numbers on any check. For example, if the bottom row showed 123456789 0100100120: 0123, the ABA routing number would be 123456789.
Abu Dhabi Investment Council - ADIC
What Does Abu Dhabi Investment Council - ADIC Mean? A sovereign wealth fund owned by Abu Dhabi, the capital of the United Arab Emirates (UAE). It is wholly owned and administered by the UAE. The Abu Dhabi Investment Council is funded by revenue from the country's oil industry, and invests those revenues in a wide range of asset classes, including equities, debt, real estate, infrastructure and private equity. Its sister fund is the Abu Dhabi Investment Authority (ADIA), which is one of the world's largest sovereign wealth funds.
Investopedia explains Abu Dhabi Investment Council - ADIC The Abu Dhabi Investment Council was established in 2007. While the fund does invest in assets across the globe, the primary focus of the ADIC is to invest in Abu Dhabi's economy. Domestic assets include banks, investment houses and insurance companies.
What Does Acceptance Market Mean? Investment market based on short-term credit instruments. An acceptance is a time draft or bill of exchange that is accepted as payment for goods. A banker's acceptance, for example, is a time draft drawn on and accepted by a bank, which is a common method of financing short-term debts in international trade including import-export transactions.
Investopedia explains Acceptance Market
who are immediately paid for exports. for importers. Typical examples would include a parent company endorsing a subsidiary or a parent endorsing a child with no credit rating. Accommodation Paper What Does Accommodation Paper Mean? A negotiable instrument that provides a third-party promise of payment in the case that the original borrower does not live up to the terms of the original transaction. For example. Investopedia explains Accommodation Endorser Accommodation endorsers typically have some relationship with the borrowing person. and for investors who trade acceptances in the secondary market. that are able to profit from the acceptances.The acceptance market is useful to exporters. Accommodation papers are usually used to support one party's creditworthiness through endorsement by a second party with a better credit rating. or by parent companies supporting their subsidiaries. Acceptances are sold in the secondary market at a discount from face value (similar to the Treasury Bill market). The advantage of having an accomodation endorser may not only include obtaining credit. who do not need to pay until possession of goods occurs. Accommodation Endorser What Does Accommodation Endorser Mean? An entity or person who agrees to back the credit obligations of another party in order to allow that party to obtain credit for which they would not otherwise qualify. for the financial institutions. at published acceptance rates. Investopedia explains Accommodation Paper Accommodation papers enable borrowers to obtain loans for which they would not otherwise be qualified. . and may also reduce the rate of interest the borrower will be charged. It is the equivalent of a payment guarantee. but may result in a reduced rate of interest as well. accommodation papers may be used by parents who want to help their children obtain credit for the first time.
savings and brokerage accounts will send a monthly statement to account holders. contract or other liability for an amount or based on terms that differ from the original amount of the contract or claim. In a bank account. Account history is recorded on the account statement. Investopedia explains Account History Account histories can be a very important tool for credit card companies to identify fraud or identity theft. depending on where the account is held. usually since inception. which are credited to the account). . The account history is also called a "ledger". because it did not satisfy the terms of the accord.Accord And Satisfaction What Does Accord And Satisfaction Mean? A legal contract whereby two parties agree to discharge a tort claim. If for some reason Company A does not deliver on the new terms. Investopedia explains Accord And Satisfaction The accord is the agreement on the terms. all prior claims relating to the matter are extinguished. the account history includes all transactions initiated by the account holder as well as passive entries (such as interest on balances. Account History What Does Account History Mean? All activity within an account. This statement should include the account history for that month. Most checking. it may be liable for the original contract. particularly when transactions are out of the ordinary in terms of their amount or place of purchase. An accord and satisfaction may occur in debt negotiations whereby the original credit agreement between the bank and Company A is revised (by stretching out payments. which is an important document to retain. Accord and satisfaction is also used to settle legal claims prior to bringing them to court. or reducing an interest rate) and Company A delivers on the new terms. and the performance (or satisfaction) has been executed. and the satisfaction is the performance of the agreement. When there is an accord and satisfaction.
Investopedia explains Account Inquiry Most financial institutions have a formal department that deals with account inquiries. ARC saves time and the expense of actually processing the check. Sometimes the term is used when there is a request to or from a credit agency about a particular consumer. Both the vendor and the bank on which the payment was drawn receive only an electronic image of the check. ARC speeds the payment to the vendor. whether it be a depositary account or credit account.ARC Mean? A process that allows paper checks received in payment for an account receivable to be electronically scanned and converted into an electronic payment through the Automated Clearing House. who otherwise would have to wait for an actualy check to be transported and processed.Account Inquiry What Does Account Inquiry Mean? Any inquiry into an account.ARC As the financial industry becomes increasingly computerized. payments or other specific transactions. the most common method of payment was lockbox banking. or any other entries relating to the account. in which payments are made to a post office box serviced by a bank. The inquiry can refer to past records.ARC What Does Accounts Receivable Conversion . Accounts Receivable Conversion .AAP . Prior to ARC and electronic payments. Investopedia explains Accounts Receivable Conversion . ARC has become the norm rather than the exception for large payment processors. Accredited Automated Clearing House Professional .
Acquisition Financing What Does Acquisition Financing Mean? The capital that is obtained for the purpose of buying another business. AAP professionals must complete 60 hours of continuing education or successfully retest in order to continue using the designation. Investopedia explains Accredited Automated Clearing House Professional .AAP To pass the AAP exam. operational requirements. risk management. ACH products and applications. Investopedia explains Acquisition Financing There are several different choices for a company that is looking for acquisition financing. which can improve job opportunities. Every five years. Acquisition Loan . applicants should understand ACH rules and regulations. Successful applicants earn the right to use the AAP designation with their names for five years.AAP Mean? A professional designation awarded by NACHA (The Electronic Payments Association) to individuals who are experts in electronic payments. providing ACH-related customer service and more. It is also helpful to have at least two years of professional experience working with ACH payments. marketing ACH services. Favorable rates for acquisition financing can help smaller companies reach economies of scale and is generally viewed as an effective method for increasing the size of the company's operations. A line of credit or a traditional loan are the most common choices. the electronic payments cycle. professional reputation and pay. Individuals with the AAP designation may work for financial institutions such as banks and credit unions as well as federal or state government entities that process electronic payments.What Does Accredited Automated Clearing House Professional . Acquisition financing allows the user to meet their current acquisition aspirations by providing immediate resources that can be applied toward the transaction.
as opposed to capital being used to fund daily operations or release a new product line. The company may be able to get more favorable terms on an acquisition loan because the assets being purchased have a tangible value. Active assets can be tangible. which may not be needed by the business at a given time in order to operate. such as buildings or equipment. which is a type of investment strategy. Active Asset What Does Active Asset Mean? An asset that is used by a business in its daily or routine operations. The acquisition loan is typically only able to be used for a short window of time. Investopedia explains Active Asset Businesses depend on active assets in order to function on a daily basis. Active assets stand in contrast to passive assets.What Does Acquisition Loan Mean? A loan given to a company to purchase a specific asset or to be used for purposes that are laid out before the loan is granted. Investopedia explains Acquisition Loan Acquisition loans are sought when a company wants to complete an acquisition for an asset but doesn't have enough liquid capital to do so. or intangible. Active Money . Active assets are listed as assets on the business's balance sheet. funds available through an acquisition loan cannot be reborrowed as with a revolving line of credit at a bank. Once repaid. Active assets should also not be confused with active asset allocation. such as patents or copyrights. and only for specific purposes.
The public demand for cash declines at times . The variable demand for cash equates to a constantly fluctuating active money total.What Does Active Money Mean? The total value of coins and paper currency in circulation amongst the public. Add-On Interest What Does Add-On Interest Mean? A method of calculating interest whereby the interest payable is determined at the beginning of a loan and added onto the principal. the Federal Reserve Banks distribute new currency for the US Treasury Department. for example. . and should follow a fee schedule outlined in the account contract. These fees can be based on teller and non-teller activities. Banks lend money out to customers which becomes classified as active money once it is actively circulated. For example. Investopedia explains Activity Charge Activity charges can be all encompassing. The sum of the interest and principal is the amount repayable upon maturity. A very common activity charge is the service charge for an automated teller machine (ATM) withdrawal at a bank other than your own. Investopedia explains Active Money Active money is all the coins and paper currency in the hands of the public. monthly.following the holiday season. the majority of US cash in circulation is outside of the United States. Due to the high demand from abroad. people typically cash paychecks or withdraw from ATMs over the weekend. An activity charge is triggered by an activity or event. a monthly service charge on a checking account may cover a certain number of transactional items. so there is more active cash on Monday than on Friday. A different account may charge only per-item fees. such as a fee for each check written or each account withdrawal. The amount of active money fluctuates seasonally. Activity Charge What Does Activity Charge Mean? A fee charged to cover the servicing costs of an account. In the United States. weekly and daily. for example.
When multiple repayments are used in add-on interest. These advances are a very common form of borrowing from a Federal Reserve Bank and are most often used when interest rates are high and money supply is short. Furthermore. adjustment credits allow banks to continue to lend through advances by the Federal Reserve that are secured through the bank's own promissory notes. Bank A will repay the loan in two equal repayments at the end of each year. . the effective lending rate becomes higher than the nominal rate. let's say Bank A borrows $1. Adjustment Credit What Does Adjustment Credit Mean? A short-term loan made by a Federal Reserve Bank to a smaller commercial bank as needed to maintain reserve requirements and support short-term lending. When reserves are low. if you are borrowing under the add-on interest method.000 for two years from Bank B and that annual interest rates are 9%.Investopedia explains Add-On Interest For example.180/2). Investopedia explains Adjustment Credit Commercial banks are required to hold a certain amount of funds in reserve in order to assure customers that their money is available upon request.180. but is still being charged interest on the amount of the original loan. This is caused the borrower returns a portion of the principal with each payment.000 x 9% x 2 years). you are paying more. The interest charge on the loan is $180 ($1. The annual payment will be $590 ($1. Advance Rate What Does Advance Rate Mean? A percentage of collateral that determines the loan amount that a lender will issue a company. Adding this to the principal gives a total of $1. In short.
but not accepting deposits . and a company has an asset of $1.Investopedia explains Advance Rate If a lender's advance rate is 85%. the African Development Fund and the Nigeria Trust Fund. It can mean any of three types of bank: (1) The bank in a loan syndicate that advises other participating banks of advances taken and changes in interest rates for a foreign or domestic borrower (2) A bank that participates in the credit card program of another bank by issuing credit cards and performing other duties (excluding financing card receivables) (3) A foreign bank doing business in the U.ADB Mean? A financial institution comprising 53 African and 24 non-African countries which promotes economic and social progress in Africa through loans.ADB What Does African Development Bank . on behalf of its parent bank. Structurally. cheaper options that may produce more energy with greater benefit to the continent’s poor.000. Some observers complain that the ADB emphasizes large infrastructure projects at the expense of smaller.000 that it could use as security on a loan. African Development Bank . the Bank has provided a cumulative $55 billion in loans and grants in the region.000. but its operations have also been criticized for being less than transparent. Agent Bank What Does Agent Bank Mean? A bank that acts in some capacity on behalf of another bank.ADB The ADB has been praised for its role in the fight against HIV/AIDS on the African continent. the ADB Group includes the African Development Bank. equity investments and technical assistance. Investopedia explains African Development Bank . Established in 1964 and headquartered in Tunisia.S. performing such tasks as issuing international letters of credit. the lender would issue a loan of up to only $850.
which coordinates the loan between the borrower and participating banks. Both laws have undergone many changes since passage. which are determined by planting. Agricultural Credit What Does Agricultural Credit Mean? Any of several credit vehicles used to finance agricultural transactions. notes. After the agreement closes. At that point.Also known as an "agency bank. and many of their restrictions have been relaxed. including loans. These types of financing are adapted to the specific financial needs of farmers. the duties of the syndicate manager end. The bank “agrees” with the Federal Reserve Board (FRB) to limit its activities to those allowed an Edge Act corporation. The state-chartered bank had to enter into an agreement with the FRB to be bound by its rules and regulations." Investopedia explains Agent Bank A syndicate manager will receive a mandate from a borrower to arrange a syndicated loan. so in 1919 Congress passed the Edge Act that authorized the FRB to charter corporations to engage in international banking. harvesting and . which gave national banks the right to invest a portion of their capital and surplus in state-chartered banks and corporations that would conduct international business. the syndicate manager is usually appointed the agent bank. Congress passed the Agreement Corporation Act. Investopedia explains Agreement Corporation In 1916. bills of exchange and banker's acceptances. The Agreement Corporation Act produced little activity. Agreement Corporation What Does Agreement Corporation Mean? A type of bank chartered by a state to engage in international banking.
stock trading and asset-liability management. All Savers Certificate What Does All Savers Certificate Mean? A type of nontaxable certificate of deposit account with a duration of one year that was used primarily by thrift institutions to build funds for mortgage lending. Short-term credit finances operating expenses. which is an algorithm for preparing a meal. Investopedia explains Algorithm Algorithms are now used throughout the financial world in areas like loan pricing. the Federal Farm Credit System (FFCS) plays a key role in agricultural credit. Algorithms are essential for computers to process information. whether ordering a book online. farmers." is used for deciding the timing. Investopedia explains Agricultural Credit In the U. making an airline reservation or using a search engine. algorithmic trading. pricing and quantity of stock orders.S. known as "algo. Originated in 1916. Algorithm What Does Algorithm Mean? A set of rules for accomplishing a task in a certain number of steps. As such. the FFCS comprises approximately 100 institutions with over $180 billion in assets and provides an estimated 35% of the real-estate and non-realestate borrowing needs of U. All Savers Certificates were authorized by the Economic Recovery Tax Act of 1981.S.. intermediate-term credit is used for farm machinery. they have become central to our daily lives. and long-term credit is used for real-estate financing. One common example is a recipe.marketing cycles. . For example.
1981. The minimum deposit was $500 and provided a fixed rate tied to Treasury bills.000 on earned interest ($2. When a loan goes bad. accelerated expensing of depreciable property and created incentives for small businesses and savings. which replenish the allowance and are recorded on the income statement as an expense. which otherwise might undergo unusual fluctuations when loans that have deteriorated over long periods of time are charged off together in a single period. 1982.000 on a joint return). the asset is removed from the books and the allowance for bad debt is charged for the book value of the loan. and December 31. Also known as "loan-loss reserve. since a certain portion of those assets can be reasonably predicted to go bad. The use of the allowance method tends to smooth bank earnings. or the Kemp-Roth Tax Cut) reduced individual income tax rates. All Savers Certificates were issued only between October 1.Investopedia explains All Savers Certificate The Economic Recovery Tax Act of 1981 (ERTA. Allowance For Bad Debt What Does Allowance For Bad Debt Mean? A valuation account used to estimate the portion of a bank’s loan portfolio that will ultimately be uncollectible." Investopedia explains Allowance For Bad Debt The allowance-for-bad-debt account is needed because the face value of a bank's loans are not the actual value. Holders received a one-time exemption from federal income tax of up to $1. Under terms of the Act. Altered Check What Does Altered Check Mean? A check or another negotiable instrument that has been materially and maliciously altered . Increases to the allowance for bad debt are made by periodic loan-loss provisions.
The focus of its lobbying effort in recent years has been the elimination of the tax-exempt status of credit unions. a customer needs to examine his or her bank statement and report the loss within 30 days. The nine-digit routing numbers seen on every check originate in a system of bank transit numbers developed by the ABA in 1910. a customer will be barred from recovery if he or she does not report the loss within one year. credit unions have been able to greatly expand their fields of membership and potential customer pools.ABA The ABA is very active in lobbying Congress on behalf of banking interests.ABA What Does American Bankers Association .to effect a fraud. risk/compliance and consulting. Investopedia explains Altered Check Altered checks are specifically addressed in the Uniform Commercial Code (UCC) Section 3-407. Regardless of any negligence by the drawee bank. Investopedia explains American Bankers Association . The term "alteration" is defined as either: (1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party. Many credit unions now have over $1 billion in assets and rival the size . the liability for an altered check can reside with the various parties involved . highly targeted membership. or (2) the unauthorized addition of words or numbers or another change to an incomplete instrument relating to the obligation of a party. Usually either the name of the payee or the amount of the check is changed.depending on the evident negligence. American Bankers Association . the ABA represents banks of all sizes. Traditionally. Ordinarily. asset management.ABA Mean? The American Bankers Association (ABA) is the largest banking trade association in the United States. however. the credit union served a small. the bank on which the check is drawn and the bank that presents the check . such as the employees of a company.including the customer drawing the check. In recent years. The ABA offers a wide range of products and services to its members. in fields such as staff training. Under the UCC. Founded in 1875. capital management. insurance.
000 bankers participate in its programs each year.AIB What Does American Institute Of Banking . marketing and compliance. and all AIB programs are offered through local ABA providers. credit card .S. Accredited Standards Committee X9 (ASC X9) oversees the global financial services industry and is responsible for all financial-services standards in the U. The ABA argues that credit unions have become so much like banks that their tax-exempt status is no longer justified.ANSI Mean? An organization that oversees the creation and dissemination of norms and standards in almost every U. the American Institute of Banking (AIB) is a provider of education and training to the banking industry. Investopedia explains American Institute Of Banking . American National Standards Institute ANSI What Does American National Standards Institute . it is now a nonprofit organization.ANSI Under ANSI's supervision. ASC X9 plays a key role in the introduction of new banking technologies.of large banks. and mortgage lending.S.AIB Mean? Founded in 1907. It was founded in 1918 by five engineering societies and three government agencies. Its programs include core courses in banking and business fundamentals as well as specific topics like retail banking. commercial.AIB The AIB is under the auspices of the American Bankers Association (ABA). More than 150. consumer. In that capacity. ANSI is also actively involved in the accreditation programs that oversee those standards. American Institute Of Banking . business sector. Investopedia explains American National Standards Institute . including ISO 9000 (quality) and ISO 14000 (environmental) management systems. Examples include standards for paper and electronic checks.
less prepaid finance charges (loan origination fees. Amount Financed What Does Amount Financed Mean? The actual amount of credit made available to a borrower in a loan. Some people argue that the American Rule allows plaintiffs to threaten other parties with expensive lawsuits in order to get a favorable settlement. so-called points. Most countries outside the U. The Act prescribes that a Truth In Lending Disclosure Statement .be provided to the consumer within three days of applying .) and any required deposit balance. Investopedia explains Amount Financed The purpose of the Truth In Lending Act. is to standardize the disclosures made to borrowers concerning the terms of a loan. passed in 1968. The amount financed is used to calculate the annual percentage rate. An exception to the American rule can occur when the court awards the winning party compensation to cover fees against a losing party that has acted in bad faith.magnetic stripes and ATM cards. Specifically.S. The American Bankers Association provides administrative support for ASC X9 standards. etc. it is the amount of the loan principal. as defined by Regulation Z disclosure requirements of the Truth In Lending Act. most notably in the way costs are calculated.which includes the amount financed .even the party that wins the case. operate under the English rule. American Rule What Does American Rule Mean? A rule in law and economics that says attorney fees should be paid by each party involved in litigation . Investopedia explains American Rule The American Rule contrasts with the English Rule. adjusted interest. in which the losing party pays the fees for the winning party.
after a peak sales period when receivables have mostly been collected and cash needs for replenishing inventory are low. The clean-up shows that credit lines are being ." Investopedia explains Announcement Effect Stock traders eagerly await the announcement of changes in Federal Reserve policy. however. It is most often used. Also known as the clean-up requirement. and stock volumes are notably higher on so-called Fed days. Also known as a "signal effect. For instance. Annual Clean-Up What Does Annual Clean-Up Mean? A banking practice that requires a borrower to pay off all balances of any renewable lines of credit and keep them at zero for 30 to 60 days or so. such as a hike or cut in a key interest rate level. Researchers have also found that trading on the day preceding announcements of Fed policy is relatively calm. Announcement Effect What Does Announcement Effect Mean? The impact on markets from the news that a change will occur at some future date. Although the annual clean up is a long-time tradition. such as a change in dividend policy or a stock split.for a loan. Clean-ups aren't usually required on secured credit lines. It can be used as a general term for the reaction to any development that affects trading. to describe investor reactions to changes in monetary policy. volatility may be substantially heightened as well. depending on the investment environment. it's becoming less common nowadays. The Statement enables borrowers to compare the costs of loans among different lenders. Investopedia explains Annual Clean-Up The annual clean up usually takes place when the customer is flush with cash.
these companies cannot accept deposits . Anticipated Interest What Does Anticipated Interest Mean? The amount of interest that a savings account will earn at some future date. Established to finance international banking transactions. Moreover. Article XII Company What Does Article XII Company Mean? An investment company chartered under Article XII of the New York State Banking Law. such as lending to foreign borrowers. Investopedia explains Anticipated Interest Anticipated interest assumes and includes compound interest. The difference is that Article XII companies don't usually buy equities. foreign exchange trading and the issuance of letters of credit. assuming no deposits or withdrawals during the intervening period. Investopedia explains Anticipated Balance The calculation of the anticipated balance assumes compound interest.used only during periods of peak cash requirements and are not needed for the normal financing of the business. Anticipated Balance What Does Anticipated Balance Mean? The amount that a savings account will have at some future date. assuming no withdrawals or additional deposits occur. they are usually owned by foreign banks. Article XII companies typically engage in businesses like those of internationally oriented commercial banks. or that a time deposit will have at maturity.
The Asian Development Bank's primary mission is to foster growth and cooperation among countries in the AsiaPacific Region. Regional development banks usually work in harmony with both the International Monetary Fund and the World Bank in their activities. Asset Quality Rating What Does Asset Quality Rating Mean? A review or evaluation assessing the credit risk associated with a particular asset. Investopedia explains Article XII Company Article XII companies are described by New York State's Banking Department as "being unique to New York. the policy of the State's Banking Department policy was to allow foreign banks to establish investment companies only if there were no other practical means of entering the New York market. They are exempt from the Federal Reserve System's reserve requirements. It has been responsible for a number of major projects in the region. This explains the existence of many of the current Article XII companies." The laws that provide for investment companies date from 1890. raising capital through the international bond markets. These . the industrialized nations are also well represented. Philippines. Asian Development Bank What Does Asian Development Bank Mean? Founded in 1966. Although the majority of the Bank's members are from the Asia-Pacific region. and only outside the state with the approval of the New York State Banking Board. For many years. Investopedia explains Asian Development Bank The two largest shareholders of the Asian Development Bank are the United States and Japan. its headquarters are in Manila.in New York State.
among other reasons. while a rating of five can signify that there are major asset quality problems and issues that need to be managed. Investopedia explains Asset Sales Asset sales are a complex transaction from an accounting perspective. Asset-Backed Commercial Paper . consideration must be put into whether or not a portfolio is appropriately diversified. what regulations or rules have been put in to place to limit credit risks and how efficiently operations are being utilized. There cannot be further recourse to the buyer. The security itself is typically issued by a bank or other financial institution. obtain free-cash flows and for liquidation requirements. Asset Sales What Does Asset Sales Mean? A sale of bank receivables by a bank to another party.ABCP Mean? A short-term investment vehicle with a maturity that is typically between 90 and 180 days. and are generally used for short-term financing needs. These types of transactions are used to mitigate asset-related risk. An asset sale is classified as such if the seller gives the buyer control of the property after payment is made. Typically.such as a loans and investment portfolios. this characteristic will cause the transaction to be regarded as financing. How effective management is in controlling and monitoring credit risk can also have an affect on the what kind of credit rating is given. a rating of one shows that asset quality is good and there is very little credit risk. Asset sales are nonrecourse sales that are also sometimes accomplished through the securitization of the bank's receivables. For example. Asset sales are often accomplished through the sales of individual loans or pools of whole loans. The notes are backed by physical assets such as trade receivables.ABCP What Does Asset-Backed Commercial Paper .assets usually require interest payments . Investopedia explains Asset Quality Rating Many factors are considered when rating asset quality. .
Investopedia explains Asset-Backed Commercial Paper . the originators are expected to pass the funds to the bank or conduit. The ALCO's primary goal is .AMLF The acronym AMLF is generated by taking the first letters from the first two acronyms ABCP (asset-backed commercial paper) and MMMF (money market mutual fund). Investopedia explains Asset-Backed Commercial Paper Money Market Fund Liquidity Facility . which.ALCO What Does Asset-Liability Committee . which then passes these funds on to the note holders. The Asset-Backed Commercial Paper Money Market Fund Liquidity Facility (AMLF) provides funding that allows financial institutions to purchase asset-backed commercial paper (ABCP) from money market mutual funds (MMMF) to prevent default on investors' redemptions. 2009. As the receivables are collected. that will provide new funding to U. "LF". Asset-Liability Committee .ALCO Mean? A risk-management committee in a bank or other lending institution that generally comprises the senior-management levels of the institution. Asset-Backed Commercial Paper Money Market Fund Liquidity Facility AMLF What Does Asset-Backed Commercial Paper Money Market Fund Liquidity Facility AMLF Mean? A lending program created by the Federal Reserve Board on September 19.S. will issue them to its investors as commercial paper. 2008. financial institutions until October 30.ABCP A company or group of companies looking to enhance liquidity may sell receivables to a bank or other conduit. The commercial paper is backed by the expected cash inflows from the receivables. in turn. The letters "AM" are then combined with the acronym for liquidity facility.
The ALCO will generally report to the board of directors and will also have regulatory reporting responsibilities. such as Visa or MasterCard. the ALCO will have responsibility for setting limits on the arbitrage of borrowing in the short-term markets. Associate Bank What Does Associate Bank Mean? A bank that is affiliated. in writing. the bank will disperse the funds accordingly. an electronic payments network or a bank card network. a request to the bank to assign the funds to a different person or company. if the principal party does not meet the obligations outlined in the letter of credit. such as a clearing house. interest rate risk. There are usually different classes of membership in regional and national associations. which correlate with shares owned or fees paid. operational risk and external events that may affect the bank's forecast and strategic balance-sheet allocations. Assignment Of Proceeds What Does Assignment Of Proceeds Mean? A document transferring all or part of the proceeds from a letter of credit to a third party beneficiary. pending the fulfillment of any requirements set forth in the letter of credit. usually through membership. no assignment will take place. monitor and approve practices relating to risk due to imbalances in the capital structure. . in a regional or national organization.to evaluate.ALCO For example. Investopedia explains Assignment Of Proceeds Once approved. To receive an assignment of proceeds. Investopedia explains Asset-Liability Committee . the beneficiary of a letter of credit is required to submit. However. while lending long-term instruments. Among the factors considered are liquidity risk.
Australian Bankers Association (ABA) What Does Australian Bankers Association (ABA) Mean? An association of banks that work on behalf of its member financial institutions to provide analysis and advice on public policy regarding banking and financial institutions. It also works within its member organization to improve the quality of service that banks and other financial institutions provide. improve financial literacy and work on taxation reform. Investopedia explains Australian Bankers Association (ABA) The association also looks to develop industry codes and standards.Investopedia explains Associate Bank The term "associate bank" is also used to describe banks that accommodate each other's customers across geographic or national lines when each bank's geographic reach is limited. improve security. It is the borrowing rate among the country's top market makers. a small state bank in the United States may have an associate relationship with a bank in London. . For example. Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW) What Does Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW) Mean? The bank bill interest rate is the wholesale interbank rate within Australia and is published by the Australian Financial Markets Association (AFMA). reform the banking payment system. and is widely used as the benchmark interest rate for financial instruments. improve banking conduct and disclosure. in order to accommodate a customer traveling there.
For example. An authorization code is commonly attached to credit card transactions. For example. only certain individuals will have the authority to approve major expenses. and will probably have an authorization code in the company's records or on a case-by-case basis to complete any approval. not only to signal a merchant that the transaction is approved. . Investopedia explains Authorization Code Authorization codes are used for any transaction or entry that has restrictions on which users are entitled to access. Authorization Code What Does Authorization Code Mean? A generic term that refers to a code or password that identifies the user as authorized to purchase. but also to help identify the transaction in follow-up examinations. hence the abbreviation BBSW. whereas in Australia they may use 100 basis points over the BBSW. or to enter information into a security-protected space. an authorization code would be required for a vendor to process a credit card transaction on behalf of a customer paying for goods. such as disputed transactions.Investopedia explains Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW) The bank bill interest rate is Australia's equivalent of LIBOR or SIBOR and is used as a reference rate in much the same way. payments are also made through the automated clearing house (ACH) network and private clearing arrangements. sell or transfer items. Although frequently abbreviated to "bank bill rate". a variable floating rate may quote 100 basis points over LIBOR. For instance. the actual term is the "bank bill swap interest rate". Authorized Settlement Agent What Does Authorized Settlement Agent Mean? A bank that is authorized to submit checks and other cash items to the Federal Reserve for collection. The 12 reserve banks collect and pay checks for depository institutions.
the U. the government substituted its own credit to certain qualified suppliers for qualified receivables arising from new auto production by the U. Investopedia explains Auto Supplier Support Program (Auto SSP) Under the program. which allows customers to complete basic transactions without the aid of a branch representative or teller. Federal Reserve payment services are available to all depository institutions.S. Automated Teller Machine . Both General Motors and Chrysler opted into the program.S. Auto Supplier Support Program (Auto SSP) What Does Auto Supplier Support Program (Auto SSP) Mean? This is a $5 billion program funded by the U. suppliers were reluctant to extend credit to them. or would allow such suppliers to sell their qualified receivables for a modest discount. For a fee.ATM Mean? An electronic banking outlet. or ATMs. the Auto Supplier Support Program (Auto SSP) was just one of many intended to help stabilize the financial crisis in the auto industry to give those companies time to restructure their operations.S. There are two primary types of automated teller machines.Investopedia explains Authorized Settlement Agent The Federal Reserve plays a primary role in the in the U. including smaller institutions in remote locations that other providers might choose not to serve. thus bringing production to a halt. payments system. Because the financial demise of the auto makers was deemed imminent. automakers in 2008 and 2009.S.S. The more complex machines will accept deposits. automakers. The basic units allow the customer to only withdraw cash and receive a report of the account's balance.ATM What Does Automated Teller Machine . auto industry.S. facilitate credit card payments and . Due to the tenuous position of the large U. government guaranteed payment to qualified suppliers. Treasury intended to ensure the availability of parts to the U.
such as income and assets . In addition to the time savings.must be verified at a later date. To access the advanced features of the complex units. Investopedia explains Automated Teller Machine . and Fannie Mae has an automated underwriting engine known as Desktop Underwriter.report account information.ATM ATMs are scattered throughout cities. eliminating human bias. Some applications may be referred to manual underwriting. Freddie Mac maintains and markets a large automated underwriting engine known as Loan Prospector. Using a machine operated by your bank is usually free. automated payments made from a banking. but accessing funds through a unit owned by a competing bank will usually incur a small fee. The automated function can be initiated either with the source of funds (the bank with the checking account) or the vendor to whom payment is owed. you will usually need to be a member of the bank that operates the machine. such as a borrower’s credit history. Automated Underwriting What Does Automated Underwriting Mean? A computer-generated loan underwriting decision. an automated underwriting systems retrieves relevant data. Using completed loan application information. Anyone with a debit or credit card will be able to access most ATMs. implementing automated underwriting systems can save a considerable amount of time. automated underwriting is preferred because it is based on algorithms. as manual underwriting can take as long as 60 days to complete. Automatic bill . therefore. and arrives at a logic-based loan decision. allowing customers easier access to their accounts. Automatic Bill Payment What Does Automatic Bill Payment Mean? Routine. Investopedia explains Automated Underwriting Automated underwriting engines can provide near-instantaneous loan approval or denial decisions. and some inputs . brokerage or mutual fund account to vendors.
periodic basis without further instruction or action by the customer. whereby all excess funds in one account are swept into another account. even payments (such as instalment loans) can be automated quite easily from the source of funds (such as a checking account. such as for mortgages or other loan payments. If the vendor is not already familiar to the bank.payments occur over an electronic payment system. Investopedia explains Automatic Bill Payment Regular. More frequently. he or she has the power to turn the automatic payment function off or to postpone the payment. The most common automatic transfer of funds are through "sweep" instructions. or from the account of one spouse to another or to a child.ATS . Automatic Transfer Service . Automatic transfers may also be used for periodic equal payments. it is the account holder who ultimately decides whether the automatic bill payment happens each month. for example) to charge the checking account for whatever amount is owed that particular month. This zero-balance account is mostly used by corporations with many subsidiaries. Investopedia explains Automatic Transfer Of Funds Automatic transfers are often used for the regular movement of funds from a checking account to a savings account. whereby funds are moved from a higher-interest-earning account to cover payments due in another account.) This involves making arrangements with the bank holding the checking account to make the exact payment each month. Automatic Transfer Of Funds What Does Automatic Transfer Of Funds Mean? A standing banking arrangement whereby transfers from a customer's account are made on a regular. however. the bank may ask the account holder to have the vendor pre-approved for this function. such as the Automated Clearing House (ACH). this power is given to the vendor (the electric company. Another common use of these transfers is for overdraft protection. The set of instructions is typically created online by the account holder. In most instances.
Given the low rates of interest paid on checking accounts. negotiable order of withdrawal (NOW) accounts and credit union share drafts)." Investopedia explains Availability Third-party checks are available according to a schedule that relies on the location of the bank on which the check is drawn. These funds are typically not usable by the customer until the check clears.e. particularly for checking accounts at brokerage firms. Investopedia explains Automatic Transfer Service . the bank will transfer the exact amount of funds required to cover unpaid checks. which also includes travelers' checks. it can mean any automatic transfer of funds between customer accounts.What Does Automatic Transfer Service .ATS Mean? A banking service offered to customers that has both a general and specific meaning. it describes the overdraft protection provided when there is an automatic transfer of funds from a customer's savings account to his or her checking account when there are insufficient funds to cover unpaid checks or maintain a minumum balance. The maximum number of days that a check can be held is set by the Expedited Funds Availability Act. these arrangements are the norm rather the exception. For example. Availability What Does Availability Mean? Funds that have been deposited by third-party check into a customer's bank account. organizations. a regular transfer from a checking account to pay off a bank loan. Automatic transfer accounts are available to individuals and sole proprietors. or they become "good funds. in defining the money stock ATS accounts are included in M1. units of government and other entities are not eligible for these accounts. Ordinarily. demand deposits and other checkable deposits (i. More specifically. According to the Federal Reserve.ATS ATS accounts were first introduced by savings and loans and mutual savings banks in the 1970s to compete with traditional commercial banks.. . On a general level. The customer avoids any overdraft fees and all the hassle associated with returned checks. or a monthly transfer from a checking account to a savings account. assuming the check is good.
Investopedia explains Availability Schedule The maximum number of days that funds can be held by banks is dictated by the Expedited Funds Availability Act. caution should be taken when accepting these notes. Since avals can be forged. bond. The third party providing the aval is usually a bank. Banks usually only provide an aval to issuers with very good credit ratings. which was enacted by Congress in 1987 and subsequently became a Federal Reserve regulation. In the United States. Average Collected Balance . Aval What Does Aval Mean? A guarantee added to a debt obligation by a third party who ensures payment should the issuing person default.Availability Schedule What Does Availability Schedule Mean? The number of days it takes for a third-party check deposited into a customer's checking account to become available to the customer. promissory note. Investopedia explains Aval The debt obligation could be a note. The process of avalizing is performed mainly in Europe. or draft. Many banks will make checks available before the maximum number of days is up. they are referred to as "checks held". banks have restrictions as to what instruments may be provided an aval. While the funds are unavailable until cleared.
Interest payable is calculated daily. so this isn't to say that there is a huge interest savings. Investopedia explains Average Collected Balance The average collected balance is used to determine the amount of interest to be paid on a monthly balance. usually one month. since uncollected funds do not earn interest. divided by the number of days in the period. For most individuals.What Does Average Collected Balance Mean? The average balance of collected funds (less any uncleared or uncollected deposits) in a bank account over a specified period. Average Daily Balance Method What Does Average Daily Balance Method Mean? A finance/accounting method where costs (and interest) are based on the amount(s) owing at the end of each day. The dollar amount of checks or other negotiable instruments that are in the process of collection over a certain period. or . Average Daily Float What Does Average Daily Float Mean? 1. but for businesses it may be very large. the difference between the average daily balance and average collected balance will be small. this results in less interest payable because payments on the card lower the interest payable immediately. We should note that the interest rate on department store credit cards are usually higher than normal credit cards. The average collected balance is calculated by adding the daily collected balance and dividing by the number of days in the period. Investopedia explains Average Daily Balance Method Most department store credit cards use this system.
interest-bearing balance of a loan or loan portfolio averaged over a period of time. the average daily float is a measure of the liquid market for a company's stock. revolving or credit card debt on which interest is charged. although it can also refer to large corporations who have both checks deposited and paid checks outstanding.2. As a trading term. instalment. Investopedia explains Average Daily Float The banking term for float is most commonly applied to banks. along with any amounts that are past due. Investopedia explains Average Outstanding Balance The average outstanding balance on credit cards and loans is a critical factor in a consumer's credit rating. it will affect the bid/ask spread and a number of other aspects of how the stock is valued. The number of company shares that are actually outstanding and available for trading on the public market on an average daily basis. Average Outstanding Balance What Does Average Outstanding Balance Mean? The unpaid. Average outstanding balances on credit cards are reported to credit agencies monthly on active accounts. The average outstanding balance refers to any term. usually one month. . If a company is closely held and only a small portion of the stock is trading in the public markets.
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