UBS Dictionary of Banking

E
In numerical data, indicates that the value is estimated. For example, «PE ratio 2006E» indicates that the price-earning ratio is based on estimated corporate earnings for fiscal year 2006.

Ea

Eagle
US 10 dollar gold coin bearing the image of an eagle. See also Double Eagle.

earnings growth / Gewinnwachstum / croissance des résultats / crescita degli utili
Fundamental figure describing the average percentage change in earnings per share.

earnings per share / Earnings per Share / bénéfice par action / earnings per share
Abbr.: EPS. Ratio showing the net profit per issued share or per share entitled to a dividend.

earnings yield / Gewinnrendite / rendement réel / rendimento degli utili
Figure obtained by dividing adjusted earnings per share by the share price for the financial year in question. It is the reciprocal of the price/earnings ratio, and is multiplied by 100 to give a percentage for comparison purposes.

easily realizable assets / leicht verwertbare Aktiven / actifs facilement réalisables / attivi facilmente realizzabili
Also: readily marketable assets. Assets for which a market exists at all times. Defined by Article 16 of Switzerland's Ordinance to the Banking Law as those assets of a bank which must be reported in the liquidity statement (such as bills eligible for discount with the National Bank or bonds qualifying as collateral).

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Eb

e-banking
Short form for electronic banking.

EBIT / EBIT / EBIT/ EBIT
Also: earnings before interest and tax. Basic earnings figure of a company derived from net profit for the year before deducting tax, interest or extraordinary items.

EBITDA / EBITDA / EBITDA / EBITDA
Also: earnings before interest, tax, depreciation and amortization. Absolute earnings figure of a company consisting of net profit for the year plus tax, interest, depreciation and amortization.

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Ec

ec
See Maestro card.

ec card / ec-Karte / carte ec / carta ec
See Maestro card.

ECB
Abbr. for European Central Bank.

economic cycle / Konjunkturzyklus / cycle conjoncturel / ciclo congiunturale
See economy.

economic indicator / Konjunkturindikator / indicateur conjoncturel / indicatore congiunturale
A measure of economic activity, providing information on the state of the economy.

economic viability / Tragbarkeit / capacité financière / sostenibilità
Credit system mainly used in property financing and defined as the burden on the borrower's income (expressed as a percentage) that the cost of a property will incur.

economy / Konjunktur / conjoncture / congiuntura
Also: business cycle, economic cycle, trade cycle. All the regular and irregular fluctuations in gross domestic product around a long-term trend level. An economic cycle consists of the following phases: upswing, peak, downturn or recession, and trough.

ECP
Abbr. for Eurocommercial paper.

ECU
Abbr. for European Currency Unit.

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Ee

EEA
The European Economic Area, consisting of the EU Member States plus Iceland, Norway and Liechtenstein.

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Ef

effective gold clause
Synonym for gold clause (1).

EFT/POS
Abbr. for Electronic Funds Transfer at the Point of Sale.

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El

electronic bank / elektronische Bank / banque électronique / banca elettronica
Bank offering electronic self-service facilities which customers can avail themselves of regardless of bank opening hours.

electronic banking / Electronic Banking / electronic banking / electronic banking
Short form: e-banking. Also: direct banking. Use of banking services via electronic channels or via designated providers and private transmission media regardless of time of day or location.

Electronic Funds Transfer at the Point of Sale / Electronic Funds Transfer at the Point of Sale / Electronic Funds Transfer at the Point of Sale / Electronic Funds Transfer at the Point of Sale
Abbr.: EFT/POS. Payment system which enables cashless payment at sales points.

electronic trading system / elektronische Börse / Bourse électronique / borsa elettronica
Also: electronic bourse, screen-based trading. Trading system where stock exchange transactions are carried out via a computer system, e.g. SWX Swiss Exchange.

eligible counterparties
Under MiFID, a subset of the category of professional clients which applies only in relation to dealing. Best execution and client order handling provisions do not apply to firms who transact with eligible counterparties.

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Em

emerging market / Emerging Market / marché émergent / mercato emergente
Newly industrializing country or market with above-average growth potential and developing financial markets.

EMI
Abbr. for European Monetary Institute.

employment / Beschäftigung / occupation / occupazione
Macro-economic term: effective deployment of the production factor labour over a given period of time. Employment can be measured in absolute (hours worked/number of people in employment) or in relative terms (employment rate).

employment rate / Beschäftigungsgrad / degré d'occupation / grado di occupazione
Macro-economic term: percentage of persons actually in employment in a country in relation to the potentially employable workforce. See also employment.

EMS
Abbr. for European Monetary System.

EMU
Abbr. for European Monetary Union.

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En

English auction / englische Auktion / enchère anglaise / asta inglese
Auction in which buyers submit increasing bids, usually following a pre-established bid increment, and in which the highest bidder wins and is required to pay the seller the amount of the winning bid. See also auction, Dutch auction.

en nom participation
Synonym for underwriter listed in prospectus. Term derived from the French «en nom» (meaning «in the name of»).

endorsee / Indossatar / endossataire / giratario
Person to whom the title to and rights of an order instrument are transferred by virtue of an endorsement.

endorsement / Indossament / endossement / girata
The transfer of title or rights to an order instrument by signing on the back of the instrument. See also assignment.

endorser / Indossant / endosseur / girante
Person who has title to a negotiable instrument and writes his name on it in order to transfer said title or rights to another person or persons.

endowment capital
Synonym for capital stock.

Energy / Energie / Energie / Energia
Equity sector incorporating shares of companies involved in oil and natural gas exploration, production, transportation and/or refininement. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

enforced saving / Zwangssparen / épargne forcée / risparmio forzato
All measures imposed by government bodies through legislation or collective agreements to establish a social security system that provides for retirement and invalidity. In Switzerland, the compulsory saving takes the form of mandatory pension savings and essentially covers contributions to the first pillar (AHV) and the second pillar (occupational pension schemes).

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Eq

equity / eigene Mittel / fonds propres / mezzi propri
Also: capital base.
(1) In a broader sense a synonym for equity capital.
(2) Banking: Article 11 of the Implementing Ordinance for the Swiss Banking Law stipulates that equity consists of core capital (Tier 1 comprising paid-up capital, disclosed reserves and profit brought forward) as well as certain additional capital components eligible for inclusion in tier one (undisclosed reserves and subordinated bond issues). Equity capital must satisfy the requirements set out in the Banking Law, but in most cases it goes beyond these prescribed limits. Equity is an important measure of how financially sound a bank is.
(3) Lending: the capital or assets which an applicant must usually have (except in leasing) in order to be granted a loan.

equity (2) / Aktien / actions / azioni
Asset class for investments in the securities category share.

Equity banking / Equity-Banking / equity banking / equity financing
Also: equity financing. Equity financing provided by a bank for newly incorporated companies or those exhibiting strong growth with a good credit rating.

equity capital; shareholders' equity / Eigenkapital / capitaux propres / capitale proprio
Net assets of a company calculated as the excess of assets over liabilities. Opposite: liabilities. See also equity.

equity earnings yield
Synonym for earnings yield.

equity financing / Eigenfinanzierung / autofinancement / autofinanziamento
Funds raised by a company for capital investment in plant and equipment or for acquisition purposes, via the issue of shares and participation certificates or, in the case of a cooperative, the issue of unit certificates. Opposite: debt financing.

equity fund / Aktienfonds / fonds de placement en actions / fondo d'investimento azionario
Investment fund that invests in shares as stipulated in its regulations.

equity method / Equity-Methode / méthode de la mise en équivalence / metodo dell'equivalenza
Method of valuing and accounting for associated companies in the consolidated financial statements based on the percentage of net asset value held.

equity paper / Beteiligungspapier / titre de participation / titolo di partecipazione
Certificated equity instrument or dividend-right certificate. See also share.

equity portfolio / Aktienportefeuille / portefeuille d'actions / portafoglio azionario
Also: share portfolio. Portfolio which is invested in equities and to a small extent in money market investments and where the investment objective is to achieve a high long-term return on the international equity markets through capital gains and forex revenues.

equity ratio / (1) Eigenfinanzierungsgrad (2) Eigenkapitalquote / coefficient d'autofinancement / grado di autofinanziamento
(1) Ratio of a company's equity to its entire capital. See also self-financing.
(2) Basic ratio which expresses equity capital as a percentage of a company's total assets.

equity return
See also dividend yield.

equity security / Dividendenwert; Dividendenpapier / valeur à revenu variable / titolo azionario
Security with an entitlement to share in profits, as against fixed-income securities with an entitlement to interest payments. Shares, participation and dividend-right certificates are equity securities. See also dividend.

equity trading ring
See ring.

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Er

ERG
Abbr. for export risk guarantee.

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Es

estimated value / Schatzungswert / valeur d'estimation / valore di stima
Also: appraised value. Value of a real estate property based on an appraisal carried out by experts.

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Eu

EUA
Abbr.: for European unit of account.

EU directive
A legislative act of the European Union which requires member states to achieve a particular result without dictating the means of achieving that result. Since directives need to be transposed into the national legal framework, margin for manoeuvre as to the form and means of implementation is given. How each country puts the directive into effect depends on their legal structure.

EU regulation
A legislative act of the European Union which is binding in its entirety and directly applicable in all Member States. For this reason, regulations constitute the most powerful form of EU law. Any Member State's local laws contrary to the regulation are overruled as EU law is supreme over the laws of the Member States.

European Monetary Union / Europäische Währungsunion / Union économique et monétaire européenne / Unione monetaria europea
Abbr. EMU. The convergence of monetary policy which occurred on 1 January 1999 amongst the majority of EU member states. This convergence led to the introduction of the euro, the common European currency, in the countries party to the agreement.

EURCO
European Composite Unit. European Unit of Account.

Eurex / Eurex / Eurex / Eurex
Umbrella organization founded jointly in the second half of 1998 by the Swiss Exchange and Deutsche Börse AG to operate the first ever cross-border futures market. The merger of SOFFEX and DTB Deutsche Terminbörse produced a common platform for full electronic trading and clearing of derivatives instruments. One of the world's largest derivatives exchanges. Website: www.eurexchange.com.

Euribor
Abbreviation for Euro Interbank Offered Rate, the interest rate at which euro interbank term deposits within the euro zone are offered by one prime bank to another prime bank.

euro / Euro / euro / euro
Single currency for European Monetary Union (EMU) launched on 1 January 1999.

euro area
Synonym for Eurozone.

Euro Traveller's Cheque / Euro Traveller Cheque / Euro Traveller Cheque / Euro Travellers Cheque
Brand of travellers cheque accepted throughout the world and marketed by a large number of financial institutions.

Eurobond
See Eurobond issue.

Eurobond issue / Euroanleihe / euro-obligation / eurobbligazione
Also: Eurobond. Bond issued on the Euromarket in a currency other than that of the issuer's country of origin.

Eurocapital market / Eurokapitalmarkt / euromarché des capitaux / euromercato dei capitali
The segment of the Euromarket where instruments with medium- to long-term maturities (i.e. maturities of longer than 18 months), above all eurobonds, are issued and traded.

Euroclear / Euroclear / Euroclear / Euroclear
International securities clearing system formed by banks and securities dealers for the collective custody and book-entry transfer of securities (initially primarily Eurobonds).

Eurocommercial paper /Euro-Commercial-Paper /europapier commercial / euro-commercial paper
Abbr.: ECP or Euro-CP. Short-term money market paper issued by major first-class companies on the Euromarket without any underwriting commitment on the part of a bank or banking consortium. Very similar to the commercial paper issued in the United States.

Euro-CP
Abbr.: for Eurocommercial paper.

Eurocredit / Eurokredit / eurocrédit / eurocredito
International bank credit denominated in a Eurocurrency.

Eurocurrency / Eurowährung / eurodevise / eurovaluta
Currency employed for balances and liabilities on the Euromarket. Examples of eurocurrencies are: Eurodollar, euro, euro-GBP, euro-CHF.

Eurodollar / Eurodollar / eurodollar / eurodollaro
Eurodollars are dollar balances and dollar liabilities beyond the borders of the United States. These transactions collectively form the Eurodollar market. See also Euromarket.

Euroland
Synonym for Eurozone.

Euromarket / Euromarkt / euromarché / euromercato
International financial market consisting of several spezialized markets on which bank loans and bond and equity issues are transacted in Eurocurrencies such as Eurodollars, Euro-DEM and Euro-FRF. Despite its name, the Euromarket is by no means confined to Europe geographically; the most important trading currency is the US dollar. Since the introduction of the euro the term 'international financial market' is increasingly being used. See also Euromoney market, Eurocapital market.

Euromoney market / Eurogeldmarkt / euromarché de l'argent / euromercato monetario
The segment of the Euromarket which specializes in settling short- to medium-term deposits (with maturities not exceeding 18 months).

Euronext / Euronext / Euronext / Euronext
Euronext came into existence in September 2000 as a result of the merger of the spot and forward exchanges of the financial centres Amsterdam, Brussels and Paris. Since then it has grown further due to the addition of the Portugese spot and forward exchange BVLP and London's LIFFE. Website: www.euronext.com.

Euronote / Euronote / euronote / euronota
Medium-term notes issued on the Euromoney market.

Euronote facility / Euronote-Facility / facilité d'euronote / euronote facility
A financial innovation based on an agreement between one or more financial institutions and a borrower which allows the borrower to borrow funds up to an upper limit through the revolving placement of Euronotes on the Euromarket within a time frame of five to seven years. A key feature is the obligation of participating banks (underwriters) to purchase the Euronotes at the contractually agreed interest rate or to make alternative backup or standby facilities available if the borrower is not able to sell the Euronotes on the market. Euronotes only have a maturity of a few months and must therefore - depending on demand - be reissued by the borrower upon expiry (revolving underwriting facility or note issuance facility).

European Central Bank / Europäische Zentralbank / Banque centrale européenne / Banca Centrale Europea
Abbr.: ECB. Central bank of the European Monetary Union whose remit is to implement European monetary policy within the EMU. The headquarters of the European Central Bank are in Frankfurt; it is wholly independent and not subject to instructions from governments or the EU executive. The central banks of member countries, which also enjoy complete independence, remain in existence and along with the ECB constitute the European System of Central Banks (ESCB). Website: www.ecb.int.

European Currency Unit / Europäische Währungseinheit / unité monétaire européenne / Unità monetaria europea
Abbr.: ECU. Former currency unit equal to the sum of the values of the currencies of the previous 12 EU member states whose currencies made up the ECU currency basket: the value of an ECU was calculated as a weighted average of these currencies. The ECU was abandoned upon introduction of the euro on 1 January 1999. The euro replaced the ECU on the basis of 1 ECU = 1 euro.

European Monetary Institute / Europäisches Währungsinstitut /Institut monétaire européen / Istituto monetario europeo
Abbr.: EMI. Precursor of the European Central Bank responsible for coordinating monetary and economic policy in the EMU countries in preparation for the third phase of the introduction of the euro.

European Monetary System / Europäisches Währungssystem / Système Monétaire Européen / Sistema Monetario Europeo
Abbr.: EMS. The European Monetary System I (EMS I) was a system of fixed, but nonetheless flexible, exchange rates determining the exchange rates for the currencies of certain EU member countries. Since the European Monetary Union came into force a new system (EMS 2) has governed the fixing of exchange rates between the euro and the currencies of those EU countries not participating in the single currency.

European Monetary Union / Europäische Währungsunion / Union économique et monétaire européenne / Unione monetaria europea
Abbr.: EMU. Established under the Maastricht Treaty on European Union. In the broader sense an economic and monetary union. Participating countries are obligated to pursue a common economic policy and use a single currency (euro). Entered into force on 1 January 1999.

European option / europäische Option / option européenne / opzione europea
Option which can only be exercised on the last day of trading, i.e. on maturity. See also: American-style option.

European System of Central Banks
Abbr. ESCB. See European Central Bank.

euroSIC / euroSIC / euroSIC / euroSIC
Clearing system of Swiss Interbank Clearing for Swiss payment transactions in euros within Switzerland and beyond its borders.

Eurozone / Eurozone / zone euro / Eurozona
Also: euro area, Euroland. Currency area of the euro.

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Ev

event-driven /Event-Driven / event driven / event driven
Hedge fund strategy in accordance with which fund managers attempt to profit from extraordinary events triggered by special exceptional situations such as company mergers, insolvencies or restructuring.

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Ex

ex dividend / ex Dividende / ex dividende / ex dividendo
A share is quoted ex dividend when the amount of the dividend has been deducted from the price. When a stock is dealt ex dividend, the buyer has no right to the last dividend, only to the next one.

ex right / ex Anrecht / ex droit / ex diritto d'opzione
Designation of a share which once trading begins in its subscription rights is traded without them. The rights are traded separately for a stipulated period on the stock exchange where they have been listed.

excess return / Überschussrendite / excédent de rendement / rendimento eccedente
Return above the money market rate.

exchange / Börse / Bourse / borsa
Financial market that operates regularly and is organized in accordance with fixed customs and practices, e.g. security, forex, option and commodity exchanges. The key exchanges include the New York Stock Exchange, the Nasdaq and the London and Tokyo stock exchanges. See also SWX Swiss Exchange.

exchange of data carriers / Datenträgeraustausch / échange de supports de données / scambio dei supporti di dati
Processing of payment transactions via data carriers or file transfer.

exchange office; bureau de change / Wechselstube / bureau de change / ufficio cambi
Also: bureau de change. Banking department/teller area that handles currency exchange and related business (such as coin dealing, traveller's cheques and letters of credit).

exchange rate / Devisenkurs / cours des devises / corso delle divise
The rate at which one currency is exchanged for another. The average of the bid and asked prices is taken as the mean rate.

exchange rate mechanism / Wechselkursmechanismus / mécanisme de change / meccanismo di cambio
The European Monetary System (EMS) was replaced following the decision taken by the European Council on 16 June 1997 to set up an Exchange Rate Mechanism (ERM II) in the third stage of the Economic and Monetary Union. The aim of this Exchange Rate Mechanism is to ensure stability and solidarity in terms of exchange rates between those countries that have introduced the euro as their currency and those that have not. Primary objective: to prevent excessively large exchange-rate fluctuations between the EUR and the currencies of non-participating nations.

exchange rate parity / Währungsparität / parité de change / parità monetaria
The officially fixed ratio of the value of one currency against another, i.e. the equivalence between the market or declared values of two different currencies. Dollar parity, for example, is the ratio of a currency against the US dollar. See also gold parity.

exchange-traded fund /Exchange-Traded-Fund / Exchange Traded Fund / exchange traded fund
Abbr.: ETF. Index fund whose composition is tied to the weighting of an index and can be traded at any time without issuing commission. See also basket product.

ex-date / Ex-Tag / jour ex droit / giorno ex
The first day after a stock dividend has become due, i.e. the day after the relevant stock is traded without the dividend.

exercise / Ausübung / exercice / esercizio
The action taken by the holder of an option contract to exercise his right to buy or sell one or more underlyings at the terms specified in the option contract.

exercise price
Price at which an option buyer can buy (call) or sell (put) the underlying securities, currencies, etc.

exotic fund
Synonym for offshore fund.

expiry / Verfall / expiration / scadenza
Also: maturity. Date on which a debt (e.g. a bond) falls due or an option expires. Borrowers who fail to meet their obligations by the expiry date are said to be in default. See also default interest.

export credit / Exportkredit / crédit à l'exportation / credito all'esportazione
Medium- to long-term credit granted for the purpose of financing export shipments. There are two main forms of export credits: supplier credit (trade credit), i.e. credit granted by the supplier to the buyers, and customer or buyer's credit granted directly to the foreign buyer or his bank. Large credits of this kind are generally furnished by a syndicate of banks (in Switzerland syndicated credit). An export credit granted jointly by a commercial bank and the government is referred to as a mixed loan or credit. This type of loan is commonly granted to developing economies.

export credit insurance / Exportkreditversicherung / assurance crédit à l'exportation / assicurazione del credito all'esportazione
Usually government-sponsored (but autonomously financed) schemes offering protection against the specific risks associated with the granting of export credits. In Switzerland known as export risk guarantee.

export documentary credit
Synonym for documentary credit.

export finance / Exportfinanzierung / financement des exportations / finanziamento delle esportazioni
Providing exporters with the required capital for the shipment abroad of merchandise, or for the rendering of services such as construction, engineering and development operations in a different country. Export finance generally takes the form of bank credits granted to the supplier or credit given to the foreign purchaser of the goods. The documentary credit plays an important role in short-term export finance. Medium- to long-term export credits furnished by the banks are the most usual form of export financing in Switzerland today. Special types of export finance are factoring, non-recourse financing and offset transactions. In Switzerland, export finance is frequently provided in combination with an export risk guarantee from the Federal Government.

export finance credit / Export-Finanzkredit / crédit financier à l'exportation / credito finanziario all'esportazione
One of the instruments in export finance. In Switzerland, export finance credits are granted by Swiss banks to finance export shipments not covered by the official export risk guarantee program, to finance downpayments, intermediate payments and local costs related to the installation of plant or equipment delivered by the Swiss producer.

export risk guarantee / Exportrisikogarantie / garantie contre les risques à l'exportation / garanzia contro i rischi delle esportazioni
Guarantee safeguarding claims arising from export operations. The Swiss Federal Government's export risk guarantee scheme has been in place since 1934 (ERG). The guarantee cover includes not only the actual merchandise exports but also certain other business services rendered by the exporter, such as the leasing of goods, construction, engineering and development work, licensing and scientific, technical and economic consulting.

exposure / Engagement / engagement / impegno
(1) Securities trade: obligation arising from new purchases of securities. Also a designation for the entire securities portfolio of an investor or group of buyers.
(2) Lending business: the credit liability which a bank has assumed in regard to a customer or borrowing country.
(3) When an investor exposes assets to the influence of uncertain variable (risk factors), the assets are exposed to these factors.

external balance / Aussenbilanz
Synonym for balance of payments. Balance of cross-border flow of goods, services and capital transfers.

external payments balance
Synonym for external balance.

external value / Aussenwert / valeur extérieure / valore esterno
Purchasing power of a domestic currency unit abroad. The external value is generally taken as the reciprocal value of the exchange rate.

extra dividend / Bonus / bonus / dividendo straordinario
Also: bonus. Special dividend distribution on shares and participation certificates made by a company in addition to its regular dividend, e.g. as a jubilee bonus.

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