UBS Dictionary of Banking

Ia

IAS / IAS / IAS / IAS
Abbr. for International Accounting Standards.

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Ib

IBAN / IBAN / IBAN / IBAN
Abbr. for International Bank Account Number.

IBRD
Abbr. for International Bank for Reconstruction and Development. Synonym for the World Bank.

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Id

IDA
Abbr. for International Development Association. One of two organizations (along with the IFC) later created to further the aims of the World Bank by providing loans to underdeveloped countries at less rigorous terms than the Bank would normally stipulate.

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If

IFA
Abbr. for Investment Fund Act.

IFC
Abbr. for International Finance Corporation. An organization of the World Bank Group. It was created to further economic development in LDCs by dealing with private investors acting without government guarantors. IDA.

ifo Business Climate Index / ifo Geschäftsklima-Index / Indice IFO / indice Ifo della fiducia delle imprese
Also known as the ifo index. German leading indicator of economic trends published every month and derived from a survey of over 7,000 companies conducted by the ifo Institute for Economic Research. Firms polled are asked to offer their assessment of the economic situation and provide details of their short-term plans.

IFRS
Abbr. for International Financial Reporting Standards.

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Ig

IGLU
Abbr. for Index Growth Linked Unit.

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Il

illiquid; not easily marketable / unkurant / non courant / illiquido
Also: not easily marketable. Refers to securities that are difficult to sell and value. Opposite: marketable.

illiquidity / Illiquidität / illiquidité / illiquidità
A lack of liquid and easily marketable assets resulting in payment liabilities and obligations not being met on time. See also insolvency.

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Im

IMF / IWF / FMI / FMI
Abbreviation for International Monetary Fund.

import credit
Synonym for documentary credit.

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In

in option
Synonym for knock-in option.

in the money / im Geld / dans la monnaie / in the money
Situation where the spot price of an option's underlying is well above (call) or below (put) the strike price. See also at the money, out of the money.

income
See yield.

income statement
Synonym for profit and loss account.

index / Index / indice / indice
Indicator which can be used to compare the value or level of a statistic with its value or level at an earlier point in time, accounting for changes due to factors such as price changes and movements in the economy. See also share index.

index certificate
Basket product based on a number of equities selected on the basis of an index or in accordance with particular criteria laid down by the issuing bank. See also basket certificate.

index fund / Indexfonds / fonds indiciel / fondo indicizzato
Investment fund whose portfolio is selected to match the structure of a recognized stock market index.

index future / Index-Future / future sur indices / future su indice
A financial future based on the development of a share or price index within a specified period. See also share index.

Index Growth Linked Unit / Index-Growth-linked-Unit / Index Growth linked Unit / Index Growth linked Unit
Abbreviation: IGLU. Structured product consisting of a bond and a call option on the market index. IGLUs offer a synthetic diversified share portfolio which is also hedged against losses (minimum capital redemption is guaranteed). See also structured product.

index hedging / Index-Hedging / garantie indicielle / index hedging
Strategy of hedging a share portfolio with put options on a share index, e.g. SMI. See also hedging.

index-linked bond issue / Indexanleihe / emprunt indexé / prestito indicizzata
Bond issue which links the amount to be repaid for principal and interest to the changes in a specific index. A price index clause can protect bondholders to a large extent against the consequences of monetary erosion (inflation).

indicator / Indikator / indicateur / indicatore
A series of data used as a proxy for the development of another statistic. See also economic indicator.

indirect listing / indirekte Kotierung / cotation indirecte / quotazione indiretta
Also known as indirect quotation. Term used in foreign exchange for a method of indicating currency prices, whereby one unit (or 100 units) of the home currency is expressed in units of a foreign currency. Most countries use direct listing.

indirect mortgage loan / indirekter Hypothekarkredit / crédit hypothécaire indirect / credito ipotecario indiretto
A mortgage credit in which a debt instrument secured by real estate (such as a mortgage note) is pledged as collateral. If the debtor becomes insolvent, the bank can dispose of or realize the property only after it has obtained title to it. See also mortgage loan, direct mortgage loan.

indirect quotation
Synonym for indirect listing.

individual custody / Einzelverwahrung / dépôt individuel / custodia individuale
Also: jacket custody. The safekeeping of securities separate from the customer's holdings of other types of securities or from the securities of other customers. Opposite: collective custody.

inducements
According to MiFID, banks must be transparent regarding any fees, commissions and non-monetary benefits they receive or pay in connection with the provision of investment and ancillary services to clients.

Industrials / Industrie / Industrie / Industria
Equity sector incorporating shares of companies producing capital goods, offering corporate services, and transports. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

inflation / Inflation / inflazione / inflation
Increase in the average level of prices with resulting decrease in purchasing power.

inflation rate / Inflationsrate / taux d'inflation / tasso d'inflazione
Statistically determined measure of the rise in price levels and therefore the decline in the value of money. The inflation rate shows the percentage change in price levels over a given period (month, year). See also inflation.

Information Technology / Info-Technologie / Technologies de l'information / Informatica
Equity sector incorporating shares of companies developing, producing and/or distributing software, hardware, or semiconductors. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

inhouse fund / Inhouse-Fonds / inhouse fund / inhouse fund
Fund created by a closely restricted group of investors for the purpose of joint capital investment and managed according to the principle of risk diversification. Unlike investment funds, inhouse funds may not be publicly advertised.

initial margin / Initial Margin / marge initiale / margine iniziale
In forward contracts, amount of cash or eligible securities required to be deposited by the buyer or seller at the clearing office via a broker or bank before engaging in margin transactions. See also variation margin.

initial public offering / Initial Public Offering / Initial Public Offering / Initial Public Offering
Also known as IPO or going public. First sale to the general public, by issuing and listing shares, of stock in a company whose equity had previously been held by a restricted group of persons. Opposite: going private.

insider / Insider / initié / insider
Person party to confidential information on the strength of his or her professional position. Normally used in connection with information which when made public is likely to have a significant influence on the price of securities. See also insider transactions.

insider dealing
Synonym for insider transaction.

insider transaction / Insidertransaktion / opération d'initié / operazione insider
Transaction designed to secure a pecuniary advantage by improperly exploiting an information lead. According to Penal Code Article 161, insider transactions are punishable offences under Swiss law. Any insider obtaining a pecuniary advantage for himself or a third party by exploiting confidential information relevant to the price of a stock shall be liable to punishment. It is also a punishable offence for persons (even if they are non-insiders) to receive and make use of insider information.

insolvency / Zahlungsunfähigkeit / incapacité de paiement / insolvibilità
The inability of borrowers to meet their payment obligations. Opposite: solvency.

instalment loan
A loan paid back in several (monthly) instalments over a specified period of time. Also: hire purchase loan (UK).

institutional investor / institutioneller Anleger / investisseur institutionnel / investitore istituzionale
Organization with substantial (mostly continuous) investment needs which trade large volumes of securities, e.g. insurance companies, pension funds, investment funds, etc.

instrike / Instrike / instrike / instrike
Limit value set in advance and stipulated within an in-option, in addition to the strike price. See also outstrike.

intangible assets
Synonym for intangibles.

intangibles / Intangibles / valeurs immatérielles / beni immateriali
Also: intangible assets. Identifiable non-monetary asset without physical substance held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. Examples include rights, patents, licences, brands, goodwill and client relationships.

interbank business / Interbankengeschäft / opération interbancaire / operazioni interbancarie
Loans and deposits processed directly between banks. Shown on the balance sheet as sums due from or to banks.

interbank funds
Borrowed funds raised within the banking system in contrast to funds placed with the bank by the public.

interbank rate / Interbankrate / taux interbancaire / tasso interbancario
Interest rate applied to credit operations between banking institutions. On the Euromoney market the London Interbank Offered Rate (LIBOR) is calculated daily and serves as a guide for the interest rates used for many international loans in euros. Another example of an interbank rate is the federal funds rate (funds that banks lend one another for short periods).

interchangeable items
Synonym for fungible items.

interest / Zins / intérêt / interesse
Remuneration paid on capital that has been borrowed. Normally refers to monetary capital, but can also be used in the case of physical capital (rent). See also interest rate, interest days.

interest coupon / Zinscoupon / coupon / cedola degli interessi
Coupon attached to bonds and medium-term notes and presented to collect interest on the due dates.

interest days / Zinstage / jours (nombre) portant intérêts / giorni per il calcolo degli interessi
The number of days per month and year taken for interest calculations. German practice (also followed in Switzerland): 1 month = 30 days, 1 year = 360 days. UK practice (followed on the Euromarket): the exact number of days in a calendar month is taken; 1 year = 365 days.

interest divisor / Zinsdivisor / diviseur fixe / divisore fisso
A constant used to simplify the calculation of interest, corresponding to the number of the days in the year divided by the rate of interest

interest margin / Zinsmarge / marge d'intérêts / margine d'interesse
(1) The difference between the interest earned by a bank and the interest paid by it.
(2) The difference between the interest rates in a particular sector of the banking business, e.g. between the interest rate for first mortgages and the interest rate on the deposits and borrowings used to refinance the mortgages.

interest operations / Zinsdifferenzgeschäft / opération d'intérêts / (1) operazioni sul differenziale degli interessi (2) operazioni su interessi
(1) All bank transactions based on an interest margin. The margin derives from the fact that the bank pays a lower rate of interest on the funds received from clients than it earns on the loans it grants. The bank uses the income from this margin to cover its expenses and make a profit.
(2) Bank transactions connected with the payment or receipt of interest (claims, liabilities). Bills of exchange and the money market securities business are generally also included under interest operations.

interest paid / Passivzinsen / intérêts débiteurs / interessi passivi
Balance sheet item showing the interest paid by the bank on funds it has received on deposit. Usually called credit interest in current account transactions. Opposite: interest received.

interest rate / Zinssatz / taux d'intérêt / tasso d'interesse
The rate of interest for a year expressed as a percentage of the capital. See also accrued interest, variable interest rate.

interest rate arbitrage / Zinsarbitrage
Exploiting arbitrage opportunities offered by differences in interest rates.

interest rate risk / Zinsrisiko / risque d'intérêt / rischio di tasso
Risk stemming from the influence of interest-rate changes on existing investments and loans and on the costs of future borrowings or liquidity to be invested in the future.

interest rate spread / Zins-Spread / écart de taux / differenziale d'interesse
Synonym for spread (3).

interest-rate swap / Zins-Swap / échange de taux d'intérêt / swap su interessi
Swap transaction whereby the two parties undertake to swap variable interest payments for fixed interest payments in respect of a certain nominal value at regular intervals over a specified period.

interest received / Aktivzinsen / intérêts actifs / interessi attivi
Interest paid to a bank for the money it has lent out. Opposite: interest paid.

interest spread / Zinsspanne / différence d'intérêts
Synonym for interest margin.

interim account
Synonym for suspense account.

interim certificate / Interimszeugnis / avis d'instrumentation / certificato interinale
Document issued by the registrar of the land register evidencing that a real estate lien (normally a mortgage certificate) has been founded but not yet officially registered. Prior to delivery of the real estate lien the rights associated with the latter can be claimed using the interim certificate.

interim dividend / Interimsdividende / dividende intérimaire / dividendo interinale
Initial distribution of part of the annual dividend on a company's shares. Dividends may be paid quarterly or half-yearly, on the basis of the company's ongoing accounts. Interim dividends are generally low and are kept as even as possible. The balance is paid out in the form of the final dividend. Interim dividends are common in countries such as the US; in Switzerland, only annual dividends are permitted. See also dividend, final dividend.

interim statement / Zwischenbilanz / bilan interimaire / bilancio intermedio
Balance sheet of a company covering a period ending between the regular annual closing dates. According to Article 23b of the Ordinance to Swiss Banking Law, the banks falling under the law with total assets exceeding CHF 100 million must draw up and publish interim financial statements (balance sheet plus income statement). Article 7 of the Banking Law further states that under certain circumstances the banks must submit monthly interim balance sheets to the Swiss National Bank. See also balance sheet.

International Accounting Standards / International Accounting Standards / normes comptables internationales / International Accounting Standards
Abbreviation: IAS. Standards drawn up by the International Accounting Standards Board with a view to ensuring the quality, transparency and comparability of balance sheets and annual accounts. The International Accounting Standards are now known as the International Financial Reporting Standards (IFRS), but the individual IAS standards have not been renamed.

International Accounting Standards Board / International Accounting Standards Board / International Accounting Standards Board / International Accounting Standards Board
Abbreviation: IASB. Independent, privately funded international organization based in London which is responsible for drawing up the International Accounting Standards. Website: www.iasb.org.

International Bank Account Number / International Bank Account Number / International Bank Account Number / International Bank Account Number
Abbreviation: IBAN. Standard developed by the ISO and the ECBS for identifying banks and account numbers. Its main purpose is to simplify cross-border financial transactions and thereby rationalize payments between various countries.

International Bank for Reconstruction and Development / Internationale Bank für Wiederaufbau und Entwicklung / Banque Internationale pour la Reconstruction et le Développement / Banca Internazionale per la Ricostruzione e lo Sviluppo
Synonym for the World Bank.

International Chamber of Commerce / Internationale Handelskammer / Chambre de commerce internationale / Camera di commercio internazionale
Abbreviation: ICC. Private, politically independent organization formed to improve trade and business relations between nations. Based in Paris, it brings together national chambers of commerce and large professional associations. See also ERA.

international financial market
See Euromarket.

International Financial Reporting Standards / International Financial Reporting Standards / International Financial Reporting Standards / International Financial Reporting Standards
Abbreviation: IFRS. Accounting standards issued by the International Accounting Standards Board. The International Accounting Standards are now referred to as the IFRS, but the individual IAS standards have not been renamed.

International Monetary Fund / Internationaler Währungsfonds / Fonds monétaire international / Fondo monetario internazionale
Abbreviation: IMF. The most important international organization for monetary policy cooperation. The IMF, like the World Bank, was established in 1944 in Bretton Woods and is headquartered in Washington, D.C. Its aims are to monitor and stabilize the international financial system to prevent crises such as the crash of 1929. Switzerland joined in May 1992. Website: www.imf.org.

International Payment Instruction / International Payment Instruction / International Payment Instruction / International Payment Instruction
Abbreviation: IPI. Standardized payment slip for international payments.

International Securities Market Association / International Securities Market Association / International Securities Market Association / International Securities Market Association
Abbreviation: ISMA. Umbrella association of institutions and traders active on the Eurobond market which develops rules and regulations governing Euromarket transactions. Website: www.isma.org.

Internet banking
See electronic banking.

intervention point / Interventionspunkt / cours d'intervention / punto d'intervento
Limit of the range within which exchange rates are allowed to deviate from parity in a system of fixed exchange rates. If there is a risk that the exchange rate will move beyond the permitted range, the regulating body is obliged to intervene in the market. There are no intervention points in a system of flexible exchange rates. See also fixed exchange rate, floating exchange rate.

intrinsic value / Substanzwert / valeur intrinsèque / valore intrinseco
(1) Value, for example of a company, obtained using objective valuation methods. See also net asset value.
(2) Options: positive difference between the current price of the underlying and the lower strike price of a call or higher strike price of a put.

inverse interest rate structure / inverse Zinsstruktur / structure inversée des taux d'intérêt / struttura inversa dei tassi
Also: inverse yield curve. Situation in which interest rates and yields for longer durations are lower than for shorter duration Normally, the interest rate or yield increases as the investment period increases.

inverse yield curve
Synonym for inverse interest rate structure.

investment / (1) Anlage, Kapitalanlage (2) Investition / (1) placement (2) investissement / investimento
(1) Banking: the act or process of placing money in a property, security or other item of value or in a venture, generally on a longer-term basis.
(2) Business management: medium and long-term investment of capital in means of production to replace worn-out equipment or expand production capacity.

investment advice
Under MiFID: the provision of a personal recommendation to a client regarding specific transactions relating to specific financial instruments.

investment advisory services / Vermögensberatung / conseils patrimoniaux / consulenza patrimoniale
Counselling facilities of a bank or other specialized units in the area of asset management. Advisory services are geared to clients' requirements: capital growth or income-oriented. Unlike with a managed account, the client ultimately makes his own investment decisions. Investment advisory services may also include succession planning, drafting agreements and establishing foundations.

investment banking / Investment-Banking / Investment Banking / investment banking
Area of banking which is primarily concerned with the securities business and corporate finance.

investment foundation / Anlagestiftung / fondation de placement / fondazione d'investimento
Tax-exempt foundation for the collective investment and management of the capital accumulated by Swiss company pension funds. As with investment funds, company pension funds may buy or sell so-called claims on their sub-funds. These sub-funds vary depending on their asset class and currency (some are mixed).

investment fund / Anlagefonds / fonds de placement / fondo d'investimento
Also: unit trust (UK), mutual fund (USA). Entity in which investors pool their capital for joint investment. The assets are managed by the fund management company for the account of the investors based as a rule on the principle of risk distribution. Depending on the type of investment fund, the assets may be invested in securities, money market instruments or in real estate; investments can also be made in special fund products and asset allocation funds. Swiss investment funds must have a variable capital and are obliged to redeem units whenever requested. See also securities fund, money market fund, real estate fund, country-specific fund, regional fund, sector fund.

Investment Fund Act / Anlagefondsgesetz / loi fédérale sur les fonds de placement / Legge sui fondi d'investimento
Swiss law which, together with the related ordinances issued by the Federal Council and the Swiss regulatory authority, governs the relationships between investors, fund management and custodian bank.

investment fund under Luxembourg law / Luxemburger Fonds / fonds de placement luxembourgeois / fondo lussemburghese
An investment fund established by a Swiss or other management company, based in Luxembourg but usually for the domestic market. Unlike Swiss products, these funds enjoy certain fiscal advantages, e.g. income is exempt from withholding tax.

investment grade / Investment-Grade / investment grade / investment grade
Term used to denote securities with ratings of between BBB and AAA, indicating that their credit quality is satisfactory or good. See also non-investment grade.

investment grade bond / Investment-Grade-Bond / obligation investment grade / investment grade bond
Bond of satisfactory to very good quality, for example a government bond or bond issued by a company with a high credit rating (BBB or above). Opposite: high-yield bond.

investment horizon / Anlagehorizont / horizon de placement / orizzonte temporale
Period of time for which an investor wishes to invest part of his assets.

investment list / Anlageliste / liste de placement / lista degli investimenti
List prepared periodically by a bank which contains a selection of the securities recommended for investment.

investment order / Anlageauftrag / mandat de placement /ordine di investimento
Order given by the client to his bank to invest the funds in his account, in particular income from securities, capital repayments and incoming payments.

investment paper / Anlagepapier / titre de placement / titolo d'investimento
Securities which are particularly suitable for longer-term investments.

investment plan / Anlageplan / plan d'investissement / piano d'investimento
Plan for the optimum investment of specific funds.

investment policy / Anlagepolitik / politique de placement / politica d'investimento
All operations to be performed in connection with the investment of funds in order to optimally attain a specific investment objective. Depending on the financial circumstances of the investor, special importance is attached to security, yield, the price and growth potential of the holdings or their liquidity. Of equal significance is the timing of the acquisition and sale of the investments.

investment research / Investment-Research / Investment Research / investment research
Synonym for financial analysis.

investment risk guarantee / Investitionsrisikogarantie / garantie contre les risques de l'investissement / garanzia contro i rischi degli investimenti
Abbreviation: IRG. Swiss federal government institution set up to facilitate investment in developing countries. Investors can use the guarantee to cover certain risks which neither they nor their partners in the recipient country can influence and which they cannot cover in any other way. Under certain conditions, the investment risk guarantee covers inability or refusal to pay on the part of governments and public authorities, as well as the risks of political events or government measures in the recipient country. In Switzerland, the IRG is governed by the Federal Law on the IRG dated 20 March 1970.

investment services and activities
Any of the services and activities listed in MiFID Annex I Section A relating to any financial instrument, namely: reception and transmission of orders in relation to one or more financial instruments; execution of orders on behalf of clients; dealing on own account; portfolio management; investment advice; underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis; placing of financial instruments without a firm commitment basis; operation of MTFs.

investment strategy / Anlagestrategie / stratégie de placement / strategia d'investimento
Entirety of the guidelines that determine the portfolio structure in terms of investment vehicle, currency, sector and maturity structure required to achieve the defined investment objective .

investor / Anleger / investisseur / investitore
Person or institution purchasing securities or tangible assets for the purpose of earning a return or receiving the monetary value. See also institutional investor.

investors' account / Anlagekonto / compte de placement / conto d'investimento
Special savings product for the medium-term investment of savings at a relatively high interest rate and normally with limited withdrawal conditions. Cash machine and cheque withdrawals are generally not possible.

investors' savings account / Anlagesparkonto / compte épargne de placement / conto di risparmio-investimenti
Account with special interest rate for medium-term savings deposits of private investment clients in combination with a securities portfolio and related transaction account.

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Ip

IPI / IPI / IPI / IPI
Abbreviation of International Payment Instruction.

IPO / IPO / IPO / IPO
Abbreviation of initial public offering.

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Ir

IRG / IRG / GRI / GRI
Abbreviation of investment risk guarantee.

irrevocable letter of credit / unwiderrufliches Akkreditiv / accréditif irrévocable / credito documentario irrevocabile
Letter of credit that cannot be changed or cancelled without the agreement of all parties, this being the norm in international trading. An irrevocable letter of credit gives the seller the security that the opening bank will make the payment if the documents stipulated under the documentary credit terms are presented as agreed. If payment is made via a correspondent bank, the opening bank can ask the latter at the demand of the principal to confirm the irrevocable letter of credit rather than merely issuing notification. The correspondent bank is then obliged to make the payment itself at the domicile of the beneficiary on due presentation of the documents (confirmed letter of credit). See also documentary credit.

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Is

ISIN / ISIN / ISIN / ISIN
Abbreviation of International Securities Identification Number. A twelve-digit number consisting of three elements used to identify securities. The first two places are reserved for a combination of letters indicating the country of origin (e.g. DE for Germany, LU for Luxembourg). These are followed by a national identification number consisting of up to ten digits.

ISM index / ISM-Index / indice ISM / indice ISM
See Purchasing Managers Index.

ISMA
Abbreviation for International Securities Market Association.

ISO code / ISO-Währungscode / code ISO / codice ISO
Internationally recognized 3-letter currency code created by the International Standardization Organization (ISO). Designed to overcome the problem of ambiguous currency references and facilitate computer processing. Code structure: the first two letters identify the country (e.g. CH for Switzerland), and the third the unit of currency (e.g. F for franc), giving CHF for the Swiss franc.

issue / Emission / émission / emissione
Issue of securities with identical features and the placement of these securities within a short space of time at the same conditions for the purpose of procuring long-term debt capital or shareholders' equity on the capital market.

issue at par / Pari-Emission / émission au pair / emissione alla pari
Securities issued at the nominal or face value, i.e. without agio or disagio (premium or discount). In the case of an above par issue the price is higher than the nominal value and in the case of a below par issue it is lower.

issue price / Ausgabepreis / prix d'émission / prezzo d'emissione
Price at which an investment fund sells newly issued units to the public.

issue prospectus / Emissionsprospekt / prospectus d'émission / prospetto di emissione
Document required by law and issued by a company or public authority planning to issue securities on the Swiss securities market. It provides detailed information about the modalities of the issue, the company's earnings outlook and the securities to be issued (bonds, shares etc.) as well as information about the issuer/guarantors. See also prospectus liability.

issuer / Emittent / émetteur / emittente
Also: borrower. Private sector corporation or public authority raising capital for its own use by issuing securities on the public market.

issuer of a covered warrant / Stillhalter / émetteur / venditore di un'opzione
Also: writer of a covered warrant, writer. Seller of an option, who is obliged to buy or sell the underlying security at the pre-determined strike price. Whether the option is exercised depends on the buyer and the price of the underlying.

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