Glossary of Financial Terms
The total amount of money in an account or credit extended against a credit account at a given time.
A table illustrating the assets and liabilities of an individual or company at a given time.
The act of using credit obtained from one source to repay credit already extended from another source.
An establishment that provides various financial services to companies and individuals.
The Canadian federal legislation passed in 1871 governing banking operations and is updated every 10 years.
A card with a unique magnetic stripe issued by a financial institution allowing the customer to conduct various banking transactions at ATM's and bank service counters.
· See Also · Debit Card
A cheque drawn by a bank to the credit of the individual or organization named on the draft.
· See Also · Cheque
Canada's central bank founded in 1934 responsible for monetary policy, bank notes, etc., but does not provide banking services to the public. Its principal role is defined by the Canadian Banking Act as: "to promote the economic and financial welfare of Canada".
A secured loan made by the Bank of Canada to a member of the Canadian Payments Association.
The rate of interest charged on one day loans to banks by a central bank.
The adjustments made to the balance of an account that reflect transactions made against an account since the most recent statement of that account.
The Bank Secrecy Act is also known as the Currency and Foreign Transactions Reporting Act. This act, passed by the United States congress in 1970, requires financial institutions to help government agencies to detect and prevent money laundering. Financial institutions must keep records of cash purchases of negotiable financial instruments, file reports of large cash transactions exceeding $10,000 (for a daily aggregate amount), and to report any activity that might signify money laundering, tax evasion, or other criminal activity.
The difference between the amount of interest a bank charges for credit and the amount it pays on deposits.
A general banking industry term used to describe the software required to run a bank, credit union or building society. The vendors that participate in selling banking software range from specialists, who may be focused on a specific part of banking functionality to "enterprise offerings" that include a complete integrated banking system. Generally speaking, however, every vendor must interface to systems other than their own to perform functions such as cheque clearing, ATM functionality, etc.
A legal state in which an individual or corporation enters at a time that they are no longer able to satisfy obligations of indebtedness to their creditor(s).
One one-hundredth of a percentage point as it relates to interest or the value of stocks, bonds or other financial products. Agent commissions, such as those related to a mortgage broker or investment advisor are often based on basis points for the face amount of the mortgage or financial instrument.
Some have referred to this Ontario tabled legislation as "Canada's Sarbanes Oxley". They're right in saying so but the bill itself is wide in scope and touches on so many areas that it is hard to digest. The original bill, in its full form, is here (NOT recommended for reading). An easier-to-read overview of the bill, as it pertains to Sarbanes-Oxley-esque regulations, by David Brown of the Law Society of Upper Canada, is here.
The process whereby a customer uses a computer to view and / or pay their bills.
A (usually monthly) statement of debits, credits and other transactions occurring on an account during a specific period of time.
An established trust whereby the beneficiary does not have any specific information regarding the amount, type or management of the assets contained in that trust.
A publicly traded company with a reputation for consistent growth, earnings and returns on investment. The term comes from the blue-colored chips, which are typically the most valuable in the game of poker.
An investment certificate issued by a government or company bearing a specific interest rate over a fixed period of time. Bonds are generally issued for a fixed term (the maturity) longer than one year.
A cheque issued on an account without the funds to honour it.
· See Also · N.S.F. Cheque
Within an investment context, bridge financing is typically extended to a company which is expected to become publicly traded in the short term. Often, this is referred to as "mezzanine financing". In the context of a mortgage Bridge Financing is used to help span two real estate transactions (e.g. the purchase of a new home before an existing home is sold).
· See Also · Mezzanine Financing
An intermediate person or organization who buys or sells financial products on behalf of a consumer. Within the financial industry there are mortgage brokers, investment dealers, insurance agents, etc. who focus on delivering personal service to their clients. In some cases these brokers work for a single company (e.g. a State Farm Agent will only sell financial products from State Farm) while in other cases these agents will sell multiple products from multiple companies. In most cases these financial brokers are licensed by a specific regulatory body.
The fee charged by a broker to act as the middle-man between a buyer and a seller. Often these fees are quoted in "basis points".
· See Also · Basis Points
Acronym for Bank Secrecy Act (see full definition above)
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This page was created and/or refreshed on December 11, 2013 @ 14:57:15
by Strategic Information Technology (SIT) Ltd., Stouffville, Ontario, Canada
The page subject is: Banking Software > Glossary of Terms - B