UBS Dictionary of Banking

Ca

Cable / Cable / cable / cable
Exchange rate between USD and GBP.

call / Call / option d'achat / call
Also: call option. Option conveying the right to purchase the underlying. Opposite: put.

callable / kündbar / callable / callable
Descriptive term applied to a loan or to securities that can be repaid ahead of schedule at the request of the borrower.

call loan / Call-Loan / prêt au jour le jour / call loan
Loan (usually granted to a broker, dealer or investment banker) which may be recalled by the lender or repaid by the borrower at any time without notice.

call money / Callgeld / argent au jour le jour / call money
Also: overnight money, day-to-day money. Funds lent by the banks to one another at interest in large, round amounts which the lending bank can call for repayment on a daily basis and which can be repaid by the borrower at any time without notice.

call price / Call-Price / prix de rachat / call price
Price at which a security can be redeemed when called.

cancellation / Storno / extourne / storno
Annulling an entry or reversing it as of the pertinent value date.

cancellation of securities / Kraftloserklärung von Wertpapieren / déclaration de nullité des titres / dichiarazione di nullità dei titoli
Legally prescribed procedure for declaring lost securities invalid. This improves the position of the owner of the securities by reinstating him with the same rights he had before the securities were lost. Only a court can declare securities invalid.

cantonal bank / Kantonalbank / banque cantonale / banca cantonale
Swiss commercial bank under the sole or majority ownership of a cantonal government. They conduct the bulk of their business in the respective canton. Most cantonal banks are public-law corporations, but more and more are converting to public limited companies which are, as a rule, backed by a guarantee under which the canton assumes liability for all or part of the bank's obligations.

cap / Cap / cap / cap
Opposite: floor.
(1) Maximum interest rate on floating rate bonds.
(2) Individually structured interest rate option that protects the buyer long-term against rising interest rates via a ceiling.

capital adequacy ratio / Deckungsverhältnis / coefficient de couverture / coefficiente di copertura
Measure of a bank's capital expressed as a percentage of its risk-weighted credit exposures.

capital adequacy requirements / Eigenmittelanforderungen / exigences en matière de fonds propres / esigenze in materia di fondi propri
Regulatory requirements which establish a minimum level of capital which banks are required to maintain to cover the level of risks taken by them on a proprietary basis.

capital allocation
Synonym of asset allocation.

capital appreciation fund / thesaurierender Fonds / fonds de capitalisation / fondo a capitalizzazione
Also: accumulation fund, growth fund. Investment fund that reinvests most of its income. The continuous reinvestment of income further enhances performance thanks to the compound interest effect.

capital export / Kapitalexport / exportation de capitaux / esportazione di capitali
Flows of capital from one country to another, mainly in the form of credit, direct investments and portfolio investments. In the case of remunerative capital exports, the exporting company acquires legal claims or participation rights abroad, whereas unrequited capital exports can take the form of non-returnable transfers to developing countries.

capital gain/loss / Kapitalgewinn/-verlust / gain/perte en capital / utile/perdita di capitale
Positive/negative difference between the price at which an investment is purchased and the price at which it is sold. Profit or loss on the realization of a long-term investment.

capital increase / Kapitalerhöhung / augmentation de capital / aumento di capitale
Move by a corporation (joint stock company) to raise its capital stock (share capital) by issuing additional shares or participation certificates.

capital investment loan / Investitionskredit / crédit d'investissement / credito d'investimento
Credit granted for the financing of fixed assets, i.e. property, plant, machines, equipment, etc. Current assets are financed with a working capital credit.

capital market / Kapitalmarkt / marché des capitaux / mercato dei capitali
Any place or system where the requirements of business enterprises and public authorities or governments for medium- and long-term capital funds can be met. Opposite: money market.

capital market rate / Kapitalmarktsatz / taux du marché des capitaux / tasso d'interesse del mercato dei capitali
Interest rate prevailing in the capital market. See also money market rate.

capital mortgage / Kapitalhypothek / hypothèque en capital / ipoteca capitale
Mortgage deed to secure a specific claim. The mortgage lien guarantees the repayment of principal, the costs of debt collection, and three years of defaulted interest at the time bankruptcy proceedings are opened or an application for the realization of the pledge is filed, as well as the interest payable since the last due date.

capital protection / Kapitalschutz / protection du capital / copertura del capitale
Component of certain derivatives that protects the investor against a significant loss on the original investment. Takes the form of a minimum repayment guarantee.

capital stock / Dotationskapital / capital de dotation / capitale di dotazione
Also: endowment capital. Capital made available by public authorities to companies that it owns and that are not public limited companies. For example, cantonal banks are provided with endowment capital by the canton. The allocation of capital by the central office of an organization to its non-autonomous branches is not regarded as endowment capital in the true sense of the word.

capital write-down / Kapitalschnitt / réduction du capital-actions / riduzione del capitale
Reduction of capital stock and ensuing reverse split, combined with a subsequent capital increase through the issue of new shares. Serves to strengthen the capital base of a company in temporary difficulties.

capitalization / Kapitalisierung / capitalisation / capitalizzazione
(1) Calculation of the capitalized value of regularly recurring payments or income streams (such as rental income) using a specific interest rate (capitalization rate).
(2) Synonym for market capitalization.

capitalization rate / Kapitalisierungssatz / taux de capitalisation / tasso di capitalizzazione
See capitalization.

capitalized income value / Ertragswert / valeur de rendement / valore di rendimento
Value of money expected to be earned or received in the future, calculated using a specific rate of interest. Calculation of the capitalized value is of particular importance in connection with the appraisal of real estate properties.

capped note / Capped Note / capped note / capped note
Also: capped FRN. Floating rate note with a maximum interest rate. See also cap.

carriage and insurance paid / Carriage and Insurance Paid / carriage and insurance paid / carriage and insurance paid
Abbr.: CIP. Clause used in the forwarding business meaning that the seller delivers the goods to the carrier nominated by him, but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and additional costs occurring after the goods have been so delivered. However, in CIP the seller also has to procure insurance against the buyer's risk of loss of or damage to the goods during the carriage. See also CIF, FAS, FOB.

carry trade / Carry-Trade / carry trade / carry trade
Capital transaction where a bond dealer borrows short-term funds and invests them in long-term bonds.

carry-over transaction / Reportgeschäft / opération de report / operazione di riporto
Also: contango transaction. Securities trading: the prolongation of a forward long trade from one expiry date to the next. The buyer sells the securities from the expired trade at the spot rate to the bank participating in the transaction, pays the contango (premium) and buys them back as of the next expiry date. Contango transactions generally take the form of a collateral loan. Opposite: backwardation.

CASH / CASH / CASH / CASH
Chip card function (e.g. on a Maestro card or Postcard). Chips can be loaded with cash up to a set amount at a Bancomat. Can be used as a cash substitute in shops displaying the CASH sign. PIN codes are not required, and the price of the purchase can be debited directly from the card.

cash-and-carry arbitrage / Cash-und-Carry-Arbitrage / arbitrage comptant-terme / arbitraggio cash and carry
See arbitrage.

cash dispenser / Geldausgabe-Automat / distributeur automatique de billets de banque / distributore automatico di banconote
Also: ATM. See Bancomat International.

cash dividend / Bardividende / dividende en numéraire / dividendo in contanti
See dividend.

cash equity / Cash Equity / cash equity / cash equity
Physical shares as opposed to derivative products

cash flow / Cashflow / flux de trésorerie / cash flow
Financial analysis: the flow of money payments to or from a company over a given period (e.g. over the course of a year). The cash flow is the net profit plus depreciation and provisions in the period in question. Extraordinary or accrued expenses and income should be excluded from calculation of the cash flow so that the total figure reflects as clearly as possible the true earnings performance of the company in question for the period. The picture should likewise not be distorted by extreme fluctuations in the amount of hidden reserves created or released. The cash flow is a key valuation parameter for both investors and lenders.

cash flow statement / Mittelflussrechnung / tableau des flux de trésorerie / conto del flusso di fondi
Part of the annual financial statements, listing all inflows and outflows of cash and therefore the change in liquidity during the year under review.

cash loan / Geldkredit / crédit en espèces / credito per contanti
Loan where the bank makes direct cash payment, e.g. current account loans or discount credit. Opposite: guarantee credit.

cash management / Cash-Management / gestion de trésorie / cash management
The planning, implementation and monitoring of measures designed to ensure that adequate liquidity is maintained, surplus funds are profitably invested and shortfalls are made up in good time and at low cost.

cash market; spot market / Kassamarkt / marché au comptant / mercato a pronti
Also: spot market. The here-and-now market for immediate delivery and payment. Opposite: futures market.

cash or title option / Cash-oder-Titel-Option / cash or title option / opzione cash or title
Abbr.: COTO. Option where the shareholder of a company has the right to purchase new shares, sell the COTO on the stock exchange or receive payment of the cash equivalent by the issuer.

cash reserve / Barreserve / réserve en espèces / riserva liquida
Assets or capital which are immediately accessible or transferable into cash.

cash settlement / Barausgleich / livraison en espèces / liquidazione per contanti
Also: cash payment. In future and forward transactions the performance of contractual obligations by paying in cash as opposed to physically delivering the commodity underlying the contract. See also financial future, forward contract.

CATS
Abbr. for Certificate of Accrual on Treasury Security.

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Cb

CBOE
Abbr. for Chicago Board Options Exchange.

CBOT
Abbr. for Chicago Board of Trade.

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Cd

CD
Abbr. for certificate of deposit.

CDB
Abbreviation for due diligence agreement.

CDO
Abbr. for collateralized debt obligation.

CDS
Abbr. for Credit Default Swap.

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Ce

CEDEL
Centrale de Livraison de Valeurs Mobilières S.A. International clearing system established in 1970 by leading banks and financial institutions in Luxembourg for the settlement of securities transactions. CEDEL merged with Deutsche Börse Clearing in 2000 to form Clearstream.

CEF
Abbr. for closed-end fund.

central bank / Notenbank / institut d'émission / istituto di emissione
Also: national bank. Only institution which has the right to issue banknotes, constitutes the monetary and credit policy authority of a currency zone. In Switzerland, this function is performed by the Swiss National Bank.

central bank money supply / Notenbankgeldmenge / monnaie de banque centrale / moneta della banca centrale
Also: monetary base. Sum of the notes and coins in circulation, plus the sight deposits held with the Swiss National Bank by the commercial banks. From 1980 to 1997 the central bank money supply served as the basis for the SNB's money supply target. The SNB is vested with powers to control the central bank money supply.

central bank powers / Notenbankinstrumentarium / moyens d'action de la banque centrale / strumentario dell'istituto di emissione
Powers granted to a central bank in respect of credit, monetary and currency policy. Areas commonly covered include discount and lombard policy, repurchase transactions, open market policy and the definition of minimum reserves.

central mortgage bond institution loans / Pfandbriefdarlehen / emprunt auprès de centrales d'émission de lettres de gage / prestiti delle centrali d'emissione di obbligazioni fondiarie
Long-term loans granted by the central mortgage bond institutions to their member banks to refinance credits secured by mortgage collateral.

central mortgage bond institution / Pfandbriefzentrale / centrale d'émission de lettres de gage / centrale di emissione di obbligazioni fondiarie
Special institution set up to issue mortgage bonds and grant long-term loans to its affiliated banks. Two such institutions were established in Switzerland in 1930, namely the Central Mortgage Bond Institution of the Swiss Cantonal Banks and the Mortgage Bond Bank of the Swiss Mortgage Institutions.

certificate / Zertifikat / certificat / certificato
(1) Record, attestation, confirmation.
(2) Collective document of title to one or more units in an investment fund.
(3) Synonym for stock certificate.

Certificate of Accrual on Treasury Security / Certificate of Accrual on Treasury Security / Certificate of Accrual on Treasury Security / Certificate of Accrual on Treasury Security
Abbr.: CATS. Form of strip (2).

certificate of deposit / Depositenzertifikat; Certificate-of-Deposit / certificat de dépôt / certificato di deposito
Abbr. CD. A certificate of deposit is a money market instrument and negotiable claim issued by a bank in return for a short- to medium-term deposit usually lasting 1-12 months, but in exceptional cases up to 5 years. By issuing the certificate the bank confirms that it has received a certain sum and that it will repay this amount to the lender together with the interest due at the end of the period decided upon by the lender. Normally certificates of deposit are issued in US dollars, even if they are issued by US banks through their branches in London (London CDs). Those certificates issued in New York play an important role as money market paper.

certificate of origin / Ursprungszeugnis; Certificate-of-Origin / certificat d'origine / certificato di origine
Document certifying the country of origin as well as the price or value of goods. It may be issued by an official organization, such as a chamber of commerce, or by the beneficiary or the manufacturer.

CESR
The Committee of European Securities Regulators.

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Cf

CFTC
Abbr. for Commodity Futures Trading Commission.

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Ch

Chamber of Commerce / Handelskammer / chambre de commerce / Camera di Commercio
Short form of International Chamber of Commerce.

change
Synonym for banknote trading.

Changeomat / Changeomat / Changeomat / Changeomat
Note-changing machine which can be used irrespective of bank opening hours to change foreign currency notes into Swiss francs and vice versa.

chart analysis
Synonym for technical analysis.

chart / Chart / chart / chart
Graph showing the price movements of shares or other securities. Charts are used by stock market analysts to predict stock price movements over the short and medium term, taking into account trading volumes and other factors. See also technical analysis (chart analysis).

check (US); cheque (UK) / Check; Scheck / chèque / assegno
An order to or from the drawee (usually a bank), cheque holder or another named person, that is payable on demand and linked to specific formalities, to pay a specified sum of money. Unlike a bill of exchange, a cheque is not a means of credit but a means of cashless payment. In Switzerland, cheques may be drawn only on a bank or the Post Office where the cheque issuer has a credit balance available to cover cheque transactions. Cheques made out to the bearer can be transferred to others simply by handing them over. Crossed cheques are limited in how they can be used. See also traveller's cheque, correspondence cheque, crossed cheque, blank cheque, banker's draft.

cheque card / Checkkarte / carte chèque / carta assegni
Also: check card (US). Card issued by a bank for accountholders who are members of a cheque system. The bank promises to cash cheques up to a certain amount provided that the signature and account number on the cheque and the cheque card are identical and the cheque card number is noted on the back of the cheque.

cheque made out to cash / Barcheck / chèque non barré / assegno ordinario
Cheque used by the drawer to withdraw cash from his account.

checkable deposits / Giralgeld; Buchgeld / monnaie scripturale / moneta di giro
Bank and postal checking account balances available at any time for transfers and conversion into cash.

CHF bonds issued by foreign borrowers / Schweizerfrankenanleihe ausländischer Schuldner / emprunt en francs suisses de débiteurs étrangers / prestito in franchi svizzeri di debitori esteri
Also known as CHF foreign bonds. CHF-denominated bonds (mostly straight, convertible or warrant issues) placed on the Swiss capital market by foreign borrowers, usually with a term to maturity of 5 to 15 years.

CHF foreign bonds
Synonym for CHF bonds issued by foreign borrowers.

Chicago Board of Trade
Abbr.: CBOT. Commodity and commodity futures exchange founded in 1848 and based in Chicago. Today the Chicago Board of Trade is a leading market for futures and options on futures. Website: www.cbot.com.

Chicago Board Options Exchange
Abbr.: CBOE. Exchange founded by the CBOT in 1973 that is based in Chicago and specializes in the trading of derivative instruments, index funds and structured products. Website: www.cboe.com.

Chinese wall / Chinese Wall / Chinese Wall / Chinese Wall
Separation of lending business from securities business at a full-service bank in order to prevent a conflict of interests which would be detrimental to the client due to the confidentiality of the information concerned. In a banking system where investment banking and brokerage are segregated to prevent conflicts of interest Chinese walls are institutionalized by creating separate legal entities for the two businesses.

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Ci

CIF
Abbr. for cost, insurance and freight.

CIP
Abbr. for carriage and insurance paid.

circuit breakers
See stop trading.

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Cl

claim / Forderung / créance / diritto
Right to a specific payment. A demand by one person on another under asserted legal or judicial rights. In the case of a nominal claim, the demand is exclusively for a certain sum of money. In bank balance sheets a distinction is drawn between claims on banks and claims on clients. See also receivables.

clean bill of lading / reines Konnossement / connaissement net / polizza di carico pulita
Also: clean B/L. A bill of lading that contains no positive notation of a defective condition or shortage either of the cargo or its packaging. The seller must deliver the goods in seaworthy packaging.

clearing / Clearing / clearing / clearing
A system used to settle mutual indebtedness between a number of organizations (banks, brokers, etc). All claims are set against one another, a balance is struck at agreed intervals and only the differences are settled. Used frequently in securities clearing.

clearing account with the Swiss National Bank / Nationalbank-Girokonto / compte de virements BNS / giroconto presso la BNS
Account maintained with the Swiss National Bank for the settlement of payment transfers. Today the clearing network is only available to companies that fall under Switzerland's banking law. The clearing account balances of the business sector are listed in the balance sheet of the Swiss National Bank as liabilities which are due daily. They can be exchanged by the accountholders into banknotes at any time. Also known as giro balances.

clearing house / Abrechnungsstelle / chambre de compensation / stanza di compensazione
Also: clearing organization. Institution which settles the payment of financial transactions between members. Used to rationalize securities trading and bank payments. Local clearing houses exist in all major banking centres, often alongside other organizations working on a national or international basis. See also bank clearing system, securities clearing.

Clearstream / Clearstream / Clearstream / Clearstream
International clearing company formed in 2000 from the merger of CEDEL and Deutsche Bank Clearing. Website: www.clearstream.com.

client classification
MiFID classifies clients into two main categories, private and professional. Private clients receive a higher level of investor protection than professional clients and benefit from a comprehensive range of statutory investor protection measures.

client information
MiFID requires that all bank client information be presented in a fair, clear and non-misleading manner with appropriate language. The firms must take reasonable measures so that clients understand their communication.

CLN
Abbr. for Credit Linked Note.

closed-end fund
Abbr.: CEF. Also: closed-end investment company. Investment fund in the form of a company (normally a public limited company) with fixed capital. A closed-end fund is not obliged to redeem units on demand. This type of investment fund is not legal in Switzerland. Opposite: open-end fund.

closing price / Schlusskurs / cours de clôture / corso di chiusura
Price of the final trade in a security at the end of a trading session. See also opening price, trading price.

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Cm

CMBS
Abbr. for commercial mortgage-backed security.

Co

coffee cup effect / Mokkatasseneffekt / effetto «tazzina moka»
Phenomenon whereby investors switch from a large to a small currency area, which has a greater impact on the small currency area than on the large one.

coinage prerogative / Münzregal / régale des monnaies / regalia delle monete
The right to mint and issue coins used as legal tender. Exercised in Switzerland by the Federal Government. See also swissmint.

co-lead manager / Co-Lead-Manager / co-chef de file / co-lead manager
Term referring to a bank with a special status within an underwriting syndicate, e.g. by taking on a larger allocation of the issue.

collar
Also: range option. Simultaneous purchase of a cap and sale of a floor.

collateral / Deckung / couverture / copertura
Security for a credit or other liability, usually in the form of something readily convertible into cash, e.g. goods, bonds, shares, etc.

collateral bond / Collateral-Bond / collateral bond / collateral bond
American term for a bond which is secured by collateral. See also collateral mortgage bond.

collateral loan / Börsenkredit / crédit boursier / credito di borsa
Loan secured by pledging securities and precious metals in order to finance stock market transactions. See also lombard loan.

collateral mortgage bond / Collateral-Mortgage-Bond / collateral mortgage bond / collateral mortgage bond
Collateral bond that is secured through the pledging of a mortgage. See also collateral bond.

collateral security
See collateral.

collateral security margin / Sicherheitsmarge / marge de garantie / margine di garanzia
The margin or difference between the market value of collateral and the credit granted. This margin is demanded by the bank to cover itself against any possible decline in the value of the collateral. See also margin (3).

collateralized debt obligation / Collateralized-Debt-Obligation / collateralized debt obligation / collateralized debt obligation
Abbr.: CDO. Bond that is secured by a diversified debt portfolio. A collateralized debt obligation is generally divided into different tranches with different credit ratings.

collection / Inkasso / encaissement / incasso
The presentation for payment of any obligation, bill of exchange, draft or other instrument.

collection endorsement / Vollmachtsindossament / endossement par procuration / girata per procura
An endorsement whereby the endorsee is given only the full authority to collect a debt, without transfer of ownership. The endorsee may also pass on the security in his turn, but only by way of a further collection endorsement.

collective account / Kollektivkonto / compte collectif / conto collettivo
Account where the accountholders are only entitled to dispose of the deposited assets and the available balances jointly. See also joint account.

collective custody / Sammelverwahrung / dépôt global / deposito globale
The safekeeping of fungible securities by category in a bank or a central depository. A record is kept of how many securities belong to the individual banks or customers, but no numbers are allocated. In Switzerland, the banks use SIS SegaInterSettle AG for collective custody. Opposite: individual custody.

collective investment agreement / Kollektivanlagevertrag / contrat de placement collectif / contratto d'investimento collettivo
Agreement by the terms of which the fund management undertakes to ensure the entitlement of each investor to a share of the investment fund proportional to the units they have acquired, and to manage this fund in accordance with the provisions of the fund regulations and the applicable legislation.

collective order / Sammelauftrag / ordre global / ordine globale
Several payment orders combined on one form.

commercial mortgage-backed security / Commercial Mortgage-Backed Security / commercial mortgage backed security / Commercial Mortgage-Backed Security
Abbr.: CMBS. Security that is backed by the cash flows of a mortgage or pool of mortgages on commercial real estate. See also mortgage-backed security.

commercial paper / Commercial Paper / papier commercial / commercial paper
Abbr.: CP. Common form of money market paper in the US in the form of a promissory note issued by a large company which gives a blank endorsement of the CP. Interest is discounted from the face value at the prevailing market rate for commercial paper on sale. Foreign companies have recently also started issuing CP in the US. See also Eurocommercial paper.

commercial register / Handelsregister / registre du commerce / registro di commercio
Official register of companies which engage in a trade, manufacturing or another type of commercial business. In Switzerland, the rights and duties pertaining to entry in the commercial register are regulated by Articles 934 ff. of the Swiss Code of Obligations.

commission / Provision / commission / provvigione; commissione
Compensation paid for work performed, generally based on the volume of the transaction or expressed as a percentage of the profit. See also bank commission.

commission and service fee income / Kommissions- und Dienstleistungsgeschäft / opérations de commissions et de prestations de service / operazione in commissione e prestazione di servizio
Also: fee and commission income, net commission income. Item in the income statement consisting of income from commission and service fee activities less commission and service fee expenses. The bank is paid in the form of commission or fees, rather than earning interest.

commitment commission / Bereitstellungskommission / commission de mise a disposition (ou de conformation) / commissione di impegno
Fee charged by banks (usually on a quarterly basis) for credit lines granted but not drawn on during the agreed loan period.

commodity exchange / Rohwarenbörse / bourse de marchandises / borsa merci
Exchange specializing in commodities / raw materials contracts. The major commodities exchanges are located in Chicago, London and New York.

commodity fund / Warenfonds / fonds spécialisé dans les contrats sur marchandises / fondo d'investimento in merci
Investment fund that invests mainly in commodity stocks or tradable commodities.

commodity futures contract / Warenterminkontrakt / contrat à terme de marchandises / contratto per consegna a termine di beni reali
Contractual agreement to sell or purchase a standardized amount of a specific physical commodity (e.g. grain, metal, oil) at a predetermined price and at a set date in the future.

Commodity Futures Trading Commission
Abbr.: CFTC. US regulatory authority for commodity futures trading.

compliance / Compliance / compliance / compliance
Set of voluntary, banking supervisory and legally prescribed measures designed to ensure that the business activities of financial institutions and the personal transactions undertaken by their employees comply with the prevailing laws, regulations and practices. Compliance serves to preserve the good reputation of financial institutions.

compound interest / Zinseszins / intérêts composés / interesse composto
Interest which is accrued on previous interest that has become due and been added to the principal amount.

compulsory stockpile bill / Pflichtlagerwechsel / effet de stocks obligatoires / effetto per il finanziamento di scorte obbligatorie
In Switzerland: promissory note eligible for discount with the Swiss National Bank at preferential rates set by the federal government and issued by companies which under Swiss federal law are required to maintain stocks of certain essential raw materials and foodstuffs.

compulsory stockpile credit / Pflichtlagerkredit / crédit pour stocks obligatoires / credito per scorte obbligatorie
In Switzerland: credit granted to finance the mandatory stockpiles of essential raw materials and foodstuffs maintained in accordance with the Federal Law on Economic Planning for War and Emergencies of September 30, 1955. In order to facilitate the financing of stocks and reduce the costs involved, the Swiss Federal Government is fully liable to the lending banks for the repayment of credit extended. Borrowers are subject to strict formalities and controls on the part of the Federal Office for National Economic Supply. The significance of compulsory stockpiling and compulsory stockpiling credit has receded greatly since the Cold War ended in 1989. See also compulsory stockpile bill.

conditional prepayment rate / Conditional Prepayment Rate / conditional prepayment rate / conditional prepayment rate
Abbr.: CPR. Method of expressing the prepayment rate for a mortgage pool that assumes that a constant fraction of the remaining principal is prepaid each month or year.

condominium ownership / Stockwerkeigentum / propriété par étages / proprietà per piani
Ownership of an entire floor of a building or of a particular apartment (flat) within a multi-family dwelling. In Switzerland, condominium ownership is regulated by federal law as a special form of co-ownership. Mortgages may be obtained for the acquisition of condominiums in a similar fashion to mortgages for entire properties.

Conf / Conf / Conf / Conf
Abbreviation used to denote Swiss government bonds (derived from Confoederatio Helvetica).

Conf future / Conf-Future / future CONF / conf future
Standardized futures contract on a Swiss government bond with a maturity of between 8 and 13 years and a coupon of 6 percent. See also financial future.

confirmed credit / bestätigtes Akkreditiv / crédit documentaire confirmé / credito confermato
Special type of documentary credit where in addition to the payment undertaking of the importer's bank an undertaking is also given by the exporter's bank (or a third-party bank, e.g. the World Bank or an international development bank) in order to provide the exporter with additional security. This second undertaking to pay acts as a safeguard against risks that may stem from the importer's bank (country risks and/or bank risks) or the importer's country (e.g. the risk of a moratorium on international payments due to a shortage of foreign exchange). See also documentary credit.

conflicts of interest
According to MiFID, banks need to ensure proper management and transparency for potential conflicts of interest.

consolidated balance sheet / konsolidierte Bilanz / bilan consolidé / bilancio consolidato
A balance sheet showing the financial condition of a corporation and its subsidiaries.

consolidation / Konsolidierung / consolidation / consolidamento
(1) Conversion of outstanding, short-term debts into fixed, long-term debts, e.g. from a construction loan to a mortgage.
(2) Stabilization of prices on the stock exchange following a downturn or after a bull market.
(3) Combination of the separate balance sheets of a group of companies into a single group or consolidated balance sheet.

consols / Consols / consols / consols
See perpetual annuity.

consortium / Konsortium / consortium / consorzio
Also: syndicate. An association of independent companies in the form of an ordinary partnership formed to bid for and, if successful, to undertake a project requiring a pooling of skills and resources. For example, banks often form consortia to undertake large-scale financial operations (bond issues, capital increases, loans, etc.) for common account.

constant annual principal and interest repayment / Annuität / annuité / annuità
The annual payment made by a borrower, consisting of an amortization of principal and an interest component. This payment remains unchanged throughout the entire repayment period. As the debt is worked down the interest payments are gradually reduced, while the principal repayment rate increases.

constant prepayment rate
Synonym for conditional prepayment rate.

construction loan / Baukredit / crédit de construction / credito edilizio
In Switzerland, a current account-type loan granted specifically for financing the construction or renovation of a building. Funds are advanced at specific stages of construction in so-called progress payments. Accrued interest is factored into the loan. On completion of building work, a construction loan is usually converted into a mortgage.

consumer banking
Synonym for retail banking.

consumer credit / Konsumkredit; Verbraucherkredit / crédit à la consommation / credito al consumo
Also: consumer loan. Relatively small loan generally granted to private individuals to acquire consumer durables or finance holidays. See also personal loan.

Consumer Discretionary / Nicht-Basiskonsumgüter / Consommation discrétionnaire / Beni voluttari
Equity sector incorporating shares of companies producing or distributing automobiles, luxury goods, watches, as well as service providers such as hotel and restaurant chains, consumer services, media, and wholesale trade. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

consumer loan
Synonym for consumer credit.

consumer price index / Konsumentenpreisindex; Verbraucherpreisindex / indice des prix à la consommation / indice dei prezzi al consumo
An index that measures the prices of consumer goods in a country, based on a basket of goods intended to replicate the purchasing habits of a typical consumer. The percentage change in the index level over time is a measure of inflation.

Consumer Staples / Basiskonsumgüter / Biens de consommation de base / Beni di prima necessità
Equity sector incorporating shares of companies producing or retailing consumer goods such as food, household appliances and personal care. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

contango / Contango / report / contango
Normal pricing situation in the market for commodities futures where the spot price is lower than the forward price. Opposite: backwardation.

contingency reserve
Synonym for reserve for doubtful debts.

contingent liability / Eventualverpflichtung / engagement conditionnel / impegno eventuale
A liability which will come into definite existence only on the occurrence of a specific event, e.g. bank liability arising from acceptance, guarantees and letters of credit. Contingent liabilities are not included in the balance sheet of a bank but have to be reported under supplementary notes.

contingent order / Ordre lié / ordre lié / ordine legato
A stock exchange order that links two transactions so that one is contingent on the other and they can only be executed together. With a contingent order the proceeds of the sale of one security can be used when switching to another.

continuous trading / laufender Handel / marché permanent / contrattazione continua
Also regular trading. The third session of stock market trading, during which new orders are continually matched to existing ones in the order book according to the matching rules, and orders that cannot be executed are entered in the order book.

contract volume / Kontraktwert / valeur du contrat / valore del contratto
The underlying value of a forward or futures transaction. It is arrived at by multiplying the number of contracts by the contract size by the price of the underlying.

contract bond / Kautionskredit / crédit contre cautionnement / credito cauzionale
A guarantee credit where the bank assumes liability towards a third party for the performance or payment obligations of its client. Contract bonds normally relate to the proper execution of work and the quality of materials supplied.

contract size / Kontraktgrösse / volume du contrat /volume del contratto
Number of units of an underlying contained in a contract.

contractor loan / Unternehmerkredit / crédit d'entreprise / credito imprenditoriale
Swiss banking term for an assignment credit granted to a building contractor or craftsman secured by an assignment of future receivables from a works contract.The contractor loan differs from a customary assignment credit in that it is always secured by the assignment of a future receivable and not an existing book claim.

control stock / Sperrminorität / minorité de blocage / azionista di riferimento
Shareholding held by management or individual shareholders which represents less than a majority but is nevertheless sufficient to exert a decisive influence at shareholders' meetings.

convention; agreement / Konvention / convention / convenzione
Written undertaking, for example on competition between banks or the repayment of savings deposits or account balances in the event of involuntary liquidation of a bank.

conversion / Konversion (1-4); Conversion (5) / conversion / conversione
(1) Replacing an old, due or called bond issue by new bonds of the same company at different terms and conditions (debt restructuring or refinancing).
(2) Renewal of a bank-issued medium-term loan.
(3) Exchange of convertible bonds for shares.
(4) Forex: exchange of a credit balance or claim for one in a different currency.
(5) Synthetic forward purchase of an underlying by means of options. By purchasing a put and selling a call with the same exercise price, a falling market price is anticipated.

conversion parity / Wandelparität / parité de conversion / parità di conversione
The conversion parity shows investors how much a stock will cost them if they exercise their conversion right. Conversion parity = nominal value x price / number of shares per convertible bond +/- payment per share.

conversion premium / Wandelprämie / prime de conversion / premio di conversione
The difference in price between acquiring shares through conversion of a convertible bond and buying the corresponding number of shares directly on the stock exchange. The conversion premium shows how many percentage points more expensive it would be to acquire shares by buying and subsequently converting convertible bonds.

conversion price / Wandelpreis / prix de conversion / prezzo di conversione
Price specified on the issue of convertible bonds for the conversion of the said bonds into shares or participation certificates.

conversion ratio / Konversionsverhältnis / rapport de conversion / rapporto di conversione
Number of shares which can be acquired for each convertible bond.

conversion right / Wandelrecht / droit de conversion / diritto di conversione
The inalienable right attached to a convertible bond entitling the holder to convert it into shares or participation certificates of the respective company.

convertibility / Konvertibilität / convertibilité / convertibilità
The ability of one currency to be converted into another. See also: full convertibility, partial convertibility.

convertible bond issue / Wandelanleihe / emprunt convertible / prestito convertibile
Issue whose bonds can be converted into shares or participation certificates of the issuing company under certain conditions and at specified terms.

co-ownership / Miteigentum / copropriété / comproprietà
Joint ownership of a property by two or more persons under which each retains title to a distinct part. Each co-owner can sell or pledge his or her portion, whereas disposal over the entire property requires the consent of all co-owners.

core inflation / Kerninflation / inflation sous-jacente / inflazione core
Inflation excluding the components of the consumer price index with the greatest upward and downward fluctuations. See also inflation.

corner / Corner / corner / corner
Also: squeeze. Anglo-American term for the market situation in which short sales by bears vastly exceed the number of stocks freely available on the market and not in firm hands. This forces buyers (especially speculators who have sold short and must make purchases to cover their sales) to pay an excessively high price. See also bear, short sale.

corner the market
To attempt to purchase all of the available supply of a commodity with the intention of controlling the market and advancing the price at will, obtaining a large profit by so doing. In the securities trade, it is an attempt to purchase a company's stock availble on the market and so force buyers (especially speculators who have sold short and must make purchases to cover their sales) to pay a high price.


corporate action / Corporate Action
Any event that brings material change to a company and affects its shareholders, both common and preferred, as well as bondholders. These events, such as splits, dividends, mergers, acquisitions and spin-offs, are generally approved by the company's board of directors; shareholders are permitted to vote on some events as well.

corporate bond / Unternehmensanleihe / obligation d'entreprise / obbligazione societaria
Fixed-income security issued by an industrial firm. See also bond, government bond.

corporate finance / Unternehmensfinanzierung / financement d'entreprise / finanziamento d'impresa
Procurement of the short- to long-term financial resources needed by the enterprise. Consulting and support given to companies in the field of corporate finance is an important area of banking, esp. for big banks.

corporate pension fund foundation / patronale Finanzierungsstiftung / fondation patronale de financement / fondazione padronale di finanziamento
Pension fund for the pooled investment of funds contributed exclusively by the employer. The invested capital can be used only for pensions or employee benefits.

corporate raider / Raider; Schwarzer Ritter / raider; chevalier noir / raider; corporate raider; cavaliere nero
Synonym for black knight.

corporate social responsibility report / Sozialbilanz / bilan social / bilancio sociale
Systematic and ongoing analysis of the positive and negative impact of a company's activities on society. Social accounting includes the social report, the statement of net value added and the social statement.

corporation / Aktiengesellschaft / société anonyme / società anonima
Synonym for joint stock company.

correlation / Korrelation / corrélation / correlazione
Statistical measure of the linear relationship between two series of figures (e.g. performance of a security and the overall market). A positive correlation means that as one variable increases, the other also increases. A negative correlation means that as one variable increases, the other decreases. By definition, the scale of correlation ranges from +1 (perfectly positive) to -1 (perfectly negative). A correlation of 0 indicates that there is no relationship between the two variables.

correspondence cheque / Korrespondenzcheck / chèque correspondance / assegno per corrispondenza
Cheque provided with a separate tearsheet designed for writing messages to the recipient or beneficiary.

correspondent / Korrespondent / correspondant / corrispondente
Synonym for correspondent bank.

correspondent bank / Korrespondenzbank / banque correspondante / banca corrispondente
Credit institution acting as agent for a bank in a financial centre where the latter does not have its own branch.

corridor warrant
Synonym for range warrant.

cost averaging
Synonym for averaging.

cost, insurance and freight / Cost, Insurance and Freight / Cost, Insurance and Freight / cost, insurance and freight
Abbr.: CIF. Also: Cost, Insurance and Freight. A contractual term usual in foreign trade which states that all costs for shipping, insurance and freight to the harbour of destination are included in the price of the goods. CIF is only practicable for sea or inland waterway transport. In all other cases the CIP clause is used in place of CIF. See also FAS,