UBS Dictionary of Banking

M&A
Abbr. for mergers & acquisitions.

Ma

macro / Macro / macro / macro
A hedge fund strategy that invests in currencies, exchange rates, commodities, gold, bonds and fixed-income securities and is based on fundamental analysis of the global macroeconomy. Macro hedge funds are the oldest and best known. Their trading volumes are very high, and they apply a diverse range of instruments. These funds are regarded as highly speculative, as leverage is particularly high and managers also make use of derivatives, and especially financial futures. The aim is to maximize returns on the hedge fund through leverage.

Maestro card
A form of payment accepted in Switzerland and worldwide when shopping, filling up at gas stations or withdrawing cash from ATMs. Outside Switzerland, it can be used to withdraw cash in the local currency wherever the Cirrus sign is displayed. The CASH chip function also permits cashless payment for small amounts, e.g. when parking, on buses and trams and at numerous outlets throughout Switzerland. See also CASH.

maintenance margin / Maintenance-Margin / marge de maintenance / margine di mantenimento
Also: variation margin. Minimum level to which a margin account for a futures contract is allowed to shrink during the term to maturity.

managed account / Vermögensverwaltungsdepot / dépôt titres avec mandat d'administration / deposito in amministrazione
Also: managed portfolio. A (generally sizeable) securities safekeeping account managed by the bank on the basis of a mandate awarded by the client. The bank is authorized to perform all operations regarded as expedient within the generally accepted definition of asset management, e.g. the adjustment of securities weightings in line with market conditions and the reinvestment of freed-up resources.

managed portfolio
Synonym for managed account.

management buyout / Management-Buyout / management buyout / management buyout
Purchase of a company's entire share capital (or a controlling percentage) by managers already active in the firm. Frequently combined with changes in the management structure and legal form of the company.

management's share of profits / Tantième / tantième / tantième
Share of net earnings paid to a company's management, or members of the Board of Directors.

mandatory exchange trading rule / Börsenpflicht / obligation de traiter en Bourse / obbligo di esecuzione in borsa degli ordini
Requirement that during trading hours exchange members (e.g. on the Swiss Exchange) settle all orders up to a pre-agreed size (limit) via the exchange.

Maple Leaf / Maple Leaf / Feuille d'érable / Maple Leaf
Canadian gold coin with a nominal value of CAD 50 and containing one ounce of pure gold. Coins containing 1/2, 1/4 and 1/10 of an ounce are also minted.

margin / Marge / marge / margine
(1) Difference between the lending and deposit rates of a bank, between purchase and sale prices or between bid and ask rates. See also interest margin or spread.
(2) Security deposited in stock market, option, foreign currency or precious metals trading for a forward or futures transaction or in connection with the sale of an option to cover the price risk. See also initial margin, variation margin.
(3) Loan-to-value ratio for collateral loans. See also collateral security margin.

margin account / Margenkonto / compte sur marge / conto a margine
An account which must be opened when concluding futures contracts so that the margin required for these transactions can be paid into it. See also initial margin, maintenance margin and variation margin.

margin call / Margin-Call / appel de marge / margin call
Demand for additional funds to increase the value of the cover for loans collateralized by securities or for financial futures whose prices have fallen below a predetermined level. See also margin account, maintenance margin.

market capitalization / Börsenkapitalisierung / capitalisation boursière / capitalizzazione di borsa
Also: stock market capitalization, capitalization. Value of a corporation as determined by the price of its equity. Calculated by multiplying the market value of the security (share, participation certificate) on a given day by the total number of securities in issue. See also market value.

market decline
Synonym for bear market.

market discount rate / Privatdiskontsatz / taux d'escompte privé / tasso privato di sconto
Also: prime rate (USA). Rate at which banks discount bank acceptances and first-rate commercial paper. Also called private discount rate.

market inefficiency / Marktineffizienz / inefficience du marché / inefficienza di mercato
Inequalities of information, liquidity, expertise, etc. in the market. These can result in price, rate or interest-rate differences between different marketplaces at a given time.

market maker / Market-Maker / teneur de marché; contrepartiste / market maker
Securities dealer who regularly quotes bid and ask prices for selected instruments and buys and sells at those prices for own account.

market manipulation / Marktmanipulation / manipulation du marché / manipolazione del mercato
Market manipulation is the practice of using sham transactions, other transactions without an economic basis or simply placing orders with intent to create the impression of market activity or to distort supply and demand, share prices or the valuation of securities.

market order / Bestensauftrag / ordre au mieux / ordine al meglio
Also: unlimited order. Order for the purchase or sale of a security without specifying a price limit. This means that the entire transaction must be carried out as quickly as possible at the best possible price. See also at best, stock market order.

Marketperform
Rating of a stock relative to the relevant sector. Over a specific investment horizon, the stock's performance is not expected to be more than 10% above or below that of the benchmark.

market price / Börsenwert; Kurswert / valeur boursière / valore di borsa
Also: market value. The price at which a security (share or bond, etc.) is traded on the stock exchange. The market price changes independently of the par value, if any, of the security in response to supply and demand.

market risk
Synonym for systematic risk.

market theories / Börsentheorien / théories boursières / teorie borsistiche
Principles or models used for predicting future stock market performance or for explaining past price trends.

market timing / Market-Timing / market timing / market timing
Hedge fund strategy characterized by large commitments to one or two asset classes, depending on economic or market outlook.

market value / (1) Kurswert (2) Verkehrswert / (1) valeur boursière (2) valeur vénale / (1) valore di borsa (2) valore venale
(1) Synonym for market price.
(2) Also: market price. The price that can be obtained (usually with reference to real estate) on the open market under ordinary circumstances. In the case of real estate, the market value is determined by an expert appraiser on the basis of the intrinsic value and the capitalized income value, and adjusted in line with local rates and the situation on the property market. See also intrinsic value, capitalized value.

marketable / kurant / courant / liquido
Securities or other assets which can be readily sold or otherwise disposed of for cash. Opposite: illiquid.

marking to market
Synonym for mark-to-market.

mark-to-market / Mark-to-Market / mark to market / mark to market
Also: marking-to-market. Daily adjustment of (generally exchange-traded) derivative contracts to calculate daily gains or losses on the relevant position.

Markowitz model / Markowitz-Modell / modèle de Markowitz / teoria di Markowitz
See modern portfolio theory.

marrying price / Applikationskurs / cours d'application / corso di applicazione
Price quoted on the stock exchange and used by the stock exchange dealer to offset purchases and sales within the bank.

MasterCard
International company for electronic payment systems, whose activities include offering the MasterCard and Maestro card.

master letter of credit
Synonym for prime letter of credit.

matcher / Matcher / matcher / matcher
Component of the Swiss Exchange system which matches bids and offers in the order book to bring about trades.

Materials / Roh-, Hilfs- und Betriebsstoffe / Matériels / Materiali
Equity sector incorporating shares of companies producing chemicals, metals (including mining), building materials, textiles, or paper and cardboard. The respective MSCI Sector index acts as a benchmark for shares of companies belonging to this sector.

material-value clause / Sachwertklausel / clause valeur réelle / clausola valore reale
Clause in a bond loan agreement linking the amount of the nominal claim to a material substance or assets or to changes in the price of real (material) values. Depending on the type of link, a distinction is made, for instance, between a gold clause and an index clause.

maturity / Verfall / échéance / scadenza
See expiry.

maturity date
Synonym for due date (2).

maximum-sum mortgage / Maximalhypothek / hypothèque maximale / ipoteca massimale
Mortgage where the underlying real estate property provides collateral in an amount not exceeding the sum entered in the Land Register (in contrast to a security interest).

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Mb

MBO
Abbr. for management buyout.

MBS
Abbr. for mortgage-backed security.

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Me

medium-term bank bond
Synonym for medium-term note.

medium-term note / (1) Kassenobligation (2) Medium-Term Note / (1) obligation de caisse (2) bon à moyen terme négociable / (1) obbligazione di cassa (2) medium-term note
(1) Also: cash bond, medium-term bank bond. In Switzerland: bond issued by a bank with a term of two to eight years.
(2) Abbr.: MTN. Medium-dated bond issued by a prime borrower as part of a revolving programme.

merchant banking / Merchant-Banking / services bancaires d'investissement / merchant banking
Also: private equity investing. A form of banking where interests in companies are acquired with the intention of selling them off years later once their value has increased.

merger / Fusion / fusion / fusione
The combining of two or more separate companies into one. In Switzerland, mergers are governed by Articles 748 and 749 of the Swiss Code of Obligations. A special form of merger is the leveraged buyout.

merger arbitrage
Synonym for risk arbitrage.

mergers & acquisitions / Mergers & Acquisitions / mergers & acquisitions / Mergers & Acquisitions
Abbr.: M&A. The M&A package of services that commercial and investment banks offer companies acquiring major shareholdings or entire companies. Usually embraces consultancy, identifying suitable investments, engineering the actual transaction and financing.

metal account / Metallkonto / compte métal / conto metallo
Precious metal account managed by a bank giving the accountholder a claim to a specified quantity of precious metal or a specified number of precious metal coins but not yet conferring title to the assets at the time they are credited.

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Mi

mid cap / Mid Cap /mid cap / mid cap
Medium-sized company, which ranks between a large cap and a small cap in terms of market capitalization and trading volumes.

middle rate / Mittelkurs / cours moyen / corso medio
Also: middle price. Arithmetic mean between several rates, for example between the bid and asked rates. Another term for average rate.

mid-month / Medio / au 15 du mois / medio
15th day of the month. Date on which forward transactions are settled (squared) on the exchanges, especially in Belgium and the United Kingdom.

MiFID
The Markets in Financial Instruments Directive, a key stepping stone in the European Commission's plan to create a single, integrated market in financial services. It seeks to harmonise financial services within the European Economic Area and to formalise and strengthen measures that protect investor interests. MiFID came into effect on November 1, 2007. Many of MiFID's requirements underline best practices. MiFID strengthens the rights of investors to obtain fair information, suitable recommendations, and transparent pricing, in particular by requiring that banks: 1) classify their investors into private and professional clients, 2) offer transactions on the most favourable terms to their clients, 3) ensure that only suitable recommendations are provided to clients, and 4) mitigate, manage or disclose any conflicts of interest.

minimum balances
Synonym for minimum reserves.

minimum reserves / Mindestreserven / réserves minimales / riserve minime
Also: minimum balances. Minimum amount of funds which by law must be deposited by the banks with the central bank. Usually non-interest-bearing. The amount which must be deposited is generally calculated as a percentage of specific liabilities. Minimum reserves restrict the ability of the banks to grant loans and thus influence the money supply.

mixed investment fund / gemischter Anlagefonds / fonds de placement mixte / fondo d'investimento misto
Investment fund investing its assets in various securities, money market instruments or real estate property.

mixed loan / Mischkredit / crédit mixte / credito misto
Type of credit granted to economically weak countries to subsidize the cost of exports and facilitate trade. The loan consists of a tranche on preferential terms (government tranche) and a tranche on market terms (bank tranche).

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Mo

model of Black and Scholes / Black-Scholes-Modell / modèle Black-Scholes / formula di Black e Scholes
Model developed by Fischer Black and Myron Scholes in 1973 for calculating the price of European options on shares and indices or warrants. The model of Black and Scholes is one of three valuation models for calculating the fair value of an option or warrant. The fair value calculation includes the price of the underlying, the strike price, the residual term to maturity, the dividend, the interest rate and the volatility.

modern portfolio theory / moderne Portfoliotheorie / théorie moderne du portefeuille / teoria moderna di gestione del portafoglio
Theory exploring how to achieve optimum risk/return characteristics for customer portfolios through international diversification of investments. Modern portfolio theory was developed by the US economist H.M. Markowitz.

momentum indicator / Momentum / momentum / indicatore di momento
An indicator used to evaluate the trend in a share price, arrived at by dividing the current price by the price n days before.

monetary base / monetäre Basis / base monétaire / base monetaria
Banknotes and coins circulating in the private sector of the economy as well as giro (clearing) balances maintained with the central bank by commerce, industry and the banks. Another name is central bank money supply.

Monetary Fund
See International Monetary Fund.

monetary policy / Geldpolitik / politique monétaire / politica monetaria
Totality of measures taken by a central bank to control the money supply, interest rates and the exchange rate against foreign currencies.

monetary policy instruments / Notenbankinstrumentarium / moyens d'action de l'institut d'émission / strumentario dell'istituto di emissione
Instruments of credit, monetary and currency policy which the central bank is authorized to use. The classical instruments include discount and Lombard policy, repurchase transactions, open market policy and minimum reserves.

monetary union / Währungsunion / union monétaire / unione monetaria
Group of countries that have a single currency and a common central bank, e.g. the European Monetary Union. See also currency zone.

money / Geld / argent / denaro
Generally accepted medium of exchange and payment in a society.

money laundering / Geldwäscherei / blanchiment d'argent / riciclaggio di denaro
Infiltration of illegally acquired assets into the legal financial system. Generally, a distinction is made between three phases of laundering:
(1) Feeding money of criminal origin into the financial system.
(2) Masking the origin of funds by frequently transferring and converting.
(3) Reintegrating the funds into the legal economy. See also money laundering law.

money laundering law / Geldwäschereigesetz / loi sur le blanchiment d'argent / legge sul riciclaggio di denaro
Law introduced in Switzerland in 1998 to supplement the pertinent provisions of the penal code and the Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence. Under the law, financial brokers and agents are required to identify their contracting partners, to establish the beneficial owner's identity, to clarify the background of any unusual looking transactions, and to keep a record of this data. If there are reasonable grounds to suspect that the funds in question are of criminal origin, this is to be reported immediately to the relevant authorities and the funds blocked.

money market / Geldmarkt / marché de l'argent / mercato monetario
The open market for lending or borrowing short-term funds (as a rule up to 12 months) and dealing in negotiable instruments. In addition to the national money markets, the Euromoney market has developed in recent years into an efficient international marketplace for dealing in short-dated loanable funds.

money market book claim / Geldmarktbuchforderung / créance comptable / credito contabile
Switzerland: short-term capital raised by first-class Swiss and foreign borrowers by tender at a fixed interest rate and maturity (up to 364 days).

money market fund / Geldmarktfonds / fonds en instruments du marché monétaire / fondo in strumenti del mercato monetario
Investment fund investing in short-dated money market paper.

money market paper / Geldmarktpapier / papier monétaire / titolo del mercato monetario
Security with a short maturity. Classical money market instruments in Switzerland are domestic (Swiss) bills of exchange, Treasury bills and Treasury notes issued by the Confederation and so-called federal rescriptions. Of particular importance for short-term investments abroad are US money market instruments or paper, usually with terms of 3 to 6 months (Treasury bills, banker's acceptances, commercial paper, finance paper and certificates of deposit issued in New York, as well as London certificates of deposit).

money market rate / Geldmarktsatz / taux du marché monétaire / tasso del mercato monetario
Also short-term rate. Interest rate applied on the money market. See also capital market rate.

money supply / Geldmenge / masse monétaire / massa monetaria
Also: money stock. The stock of money that exists in an economy at a given time. Stabilizing prices by steering the money supply is an important economic policy target. In Switzerland, money supply policy measures focused for some years (until 1978) on M1 (circulation of coins and notes in the non-banking sector and domestic non-bank demand deposits at banks and in postal checking accounts). In 1980 the Swiss National Bank began setting a new money supply target based on the adjusted central bank money supply. Factoring in further monetary aggregates (time deposits, savings) gives M2 and M3. The latter has served as reference parameter for the Swiss National Bank since 1997.

month-end closing / Ultimo / ultimo / fine mese
(1) Refers to transactions settled as at the end of the month (last business day of the month).
(2) Time when forward transactions are closed out (liquidated, squared). See also mid-month.

month-end borrowing / Ultimofinanzierung / financement de l'échéance mensuelle / finanziamento di fine mese
Borrowing in order to bridge temporary liquidity shortages at month-end. This kind of financing furnished by the Swiss National Bank to commercial banks helps to avoid extreme interest-rate fluctuations.

moratorium / Moratorium / moratoire / moratoria
A freeze on the repayment of debt or the extension of the lending period. Moratoriums are often declared by governments, typically in favour of developing countries. See also Paris Club, debt rescheduling, debt rescheduling agreement.

mortgage / Hypothekardarlehen / prêt hypothécaire / mutuo ipotecario
A written conveyance of title to real estate property, but not its possession, to secure the payment of a debt or the performance of some obligation. Distinguished from a lien in that the creditor has actual title to the property and from a pledge in that the debtor retains possession. In Switzerland, such rights may take the form of a mortgage assignment or mortgage note. See also fixed-rate mortgage, portfolio mortgage.

mortgage-backed security / Mortgage-Backed-Security / mortgage-backed security / mortgage backed security
Abbr.: MBS. Security similar to an asset-backed security, where the underlying assets are loans to owners of residential or commercial real estate secured with a mortgage over the property.

mortgage bank / Realkreditinstitut / établissement de crédit hypothécaire / istituto di credito ipotecario
Bank that specializes in granting mortgage loans.

mortgage-backed bond
Synonym for mortgage bond.

mortgage bond / Pfandbrief / lettre de gage / obbligazione fondiaria
Also: mortgage-backed bond. Bond issued by central mortgage bond institutions in Switzerland and secured by property mortgages granted by the banks. The bondholders have a lien on the underlying assets enforceable against the mortgage bond institution. The German Pfandbrief is more tightly defined than the English term «mortgage-backed bond/mortgage bond» and may only be issued by mortgage banks, ship mortgage banks and a number of public sector issuers (central mortgage bank institutions). Also available in the form of public sector Pfandbriefe.

mortgage fund / Hypothekarfonds / fonds hypothécaire / fondo ipotecario
Investment fund that invests in mortgage deeds and other similar securities. Under Art. 72 of Switzerland's Investment Fund Act, the Federal Council can issue instructions regarding the construction of mortgage funds. The Council has never yet made use of this power, and mortgage funds have therefore not been established in Switzerland.

mortgage loan / Grundpfandkredit / crédit garanti par hypothèque / credito ipotecario
Loan secured by a mortgage on real property. In granting these loans, the banks differentiate between mortgage investments, indirect mortgage loans and construction loans.

mortgage note / Schuldbrief / cédule hypothécaire / cartella ipotecaria
A security which is vested by a personal claim and secured by a lien or mortgage on real estate property. It incorporates both the claim and its lien.

mortgage note in the name of the owner / Eigentümerschuldbrief / cédule hypothécaire en faveur du propriétaire / cartella ipotecaria a nome del proprietario
Mortgage note in which both lender and borrower are the same person. A mortgage note in the name of the owner is issued, for example, when a mortgage is repaid and the mortgage note is transferred to the name of the borrower.

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Ms

MSCI World Index / MSCI-World- Index / MSCI World Index / indice mondiale MSCI
Short form: MSCI World. A global equity index for the world's developed equity markets. The MSCI World Index is compiled by Morgan Stanley, a major financial service provider. MSCI is short for Morgan Stanley Capital International.

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Mt

Abbreviation for Multilateral Trading Facility.

MTF
Abbreviation for Multilateral Trading Facility.

MTN / MTN / BMTN / MTN
Abbr. for medium-term note.

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Mu

multicurrency credit line
Credit line which may be drawn on in one or more currencies stipulated in the credit agreement.

multiple lien (on property) / Gesamtpfandrecht / acte de gage collectif / diritto di pegno generale
The pledging of several pieces of land as security for the repayment of the same claim, each property being encumbered with the full amount of the pledge. A multiple lien may be established only if the pieces of land belong to the same owner or are owned by debtors granting joint and several guarantee.

Multilateral Trading Facility (MTF)
A multilateral system which brings together multiple third-party buying and selling of interests in financial instruments - in the system and in accordance with non discretionary rules - in a way that results in a contract in accordance with the provisions of MiFID.

mutual fund
Synonym for investment fund.

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EU directive

EU directive