Glossary of Financial Terms
A crown corporation which insures deposits made by customers at participating banks against loss or theft. In 1967, the Canada Deposit Insurance Corporation (CDIC) was incorporated as a Crown corporation under Schedule III, Part 1 of the Financial Administration Act. It was created to insure deposits in banks, trust companies and loan companies against loss in case of member failure. Since its creation, CDIC has dealt with the failure of 43 member institutions. It has protected more than two million depositors holding some $24 billion in insured deposits at these institutions at a cost of about $4.7 billion to CDIC. No member institutions have failed since June 1996.
A federal government program that provides monetary grants to registered education savings plans initiated by parents to be used to pay for the education of a dependant.
· See Also · RESP
An investment, issued to Canadian citizens only that pays a guaranteed rate of return but is only cashable on its yearly anniversary or within thirty days of that time.
· See Also · Canada Savings Bonds
An investment, issued to Canadian citizens only that pays a guaranteed rate of return and is cashable at any time.
· See Also · Canada Premium Bond
The Canadian Bankers Association is a professional industry association that provides its members - the chartered banks of Canada - with information, research and operational support and contributes to the development of public policy on the financial services industry.
· See Also · Institute of Canadian Bankers
The CDS is the designated central clearing corporation for all equity trades in Canada.
A group that represents Chartered Accountants in Canada from a regulatory and guidance perspective. To find out more see the CICA website .
The CPA is a not-for-profit organization created by an Act of Parliament in 1980. The Association’s mandate, as amended through the Canadian Payments Act in 2001, is: (i) to establish and operate national systems for the "clearing and settlement" of payments and other arrangements for the making or exchange of payments, (ii) to facilitate the interaction of the CPA’s systems with others involved in the exchange, clearing and settlement of payments, and (iii) to facilitate the development of new payment methods and technologies.
Sadly, there is no such comission or Canadian federal body overseeing the trading of stocks. The rules governing the trading of securities are largely regulated by provincial laws.
· See Also · Ontario Securities Commission
A cheque that has been cashed by the recipient, presented to the issuing bank, then returned to the holder of the account on which it was drawn.
A term referring to the maximum rate of interest payable on a variable rate loan or mortgage.
The amount by which a capital investment has increased during a given time period.
· See Also · Capital Loss
A monetary investment in property or equipment for a business.
The amount by which a capital investment has decreased during a given time period.
· See Also · Capital Gain
Card skimming occurs when a criminal devises a method to scan a bank card while also recording the PIN. One common method used is to place a "false front" on a typical bank machine, gas pump, or debit device and then, simultaneously, record the user's PIN using a camera. Criminal organizations have virtually perfected this technique but it usually requires someone working at a merchant to pull it off successfully.
A statement specifying the rights and obligations of all parties specific to a bank card, debit card, credit card, or prepaid debit card.
· See Also · Account
A certificate sold by a bank that bears a specific amount of interest and matures at a specific time.
· See Also · Term Deposit
A Canadian term to denote a financial institution designated as either Schedule I, II or III operating under the regulations set forth in The Bank Act.
A cheque, or (in American English) "check", thought to have developed from Persian "chek", is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specific demand account held in the maker/depositor's name with that institution. Both the maker and payee may be natural persons or legal entities.
· See Also · Cheque
A cheque, or (in American English) "check". See definition for "check" above.
· See Also · Check
Cheque Kiting is against the law and involves using two bank accounts to produce an "imaginary float". Typically the scenario goes like this: $1,000 is deposited in Account A using a cheque written on Account B. A deposit is then written to deposit to Account B from Account A. This kind of fraud is more popular in the United States, for two reasons: 1) The United States traditionally requires longer cheque clearing time than most other modern economies. 2) Most other modern economies have long abondoned the paper cheque as a form of payment and have resorted to debit cards and direct debit.
A written record of cheques issued against a specific account.
An account against which cheques may be issued.
· See Also · Savings Account
Acronym for Canadian Institute of Chartered Accountants.
The payment and transferring of funds between financial institutions and brokerages for financial transactions and securities.
· See Also · Canadian Payments Association
The system in place allowing financial institutions clear and settle transactions. Typically the clearing process carried out on a daily basis.
A credit card bearing the logo of an organization having a type of sponsorship arrangement with the issuing credit card company entitling the sponsor to some form of remuneration based on a percentage of purchases made using that card.
· See Also · Affinity Credit Card
Money or property used as a surety or guarantee by a bank during the course of a loan or mortgage issued by that bank.
An account at a bank that bears some properties of both a chequing and savings account.
Banking and financial services provided specifically for businesses and organizations.
The fee charged by a broker or third party for acting on behalf of their client.
Interest that is paid at specific intervals which is added to, and becomes part of the principal amount.
Incremental interest earned on a deposit or asset which periodically becomes part of the interest bearing principal.
The measurement of the increase or decrease in value of items commonly purchased by average consumers referred to as a "basket of goods".
The term "core banking software" has no fixed definition. Generally speaking it is mean to represent the required software functionality required to run a bank. This will generally include retail banking, loans, mortgages, lines of credit, term deposits and investments. There are often major differences, however, between vendors, as to the exact definition of core banking. As an example, some vendors believe that accounting is not part of core banking. Other vendors believe that web banking falls outside of core banking.
The measurement of the increase or decrease in value of items commonly purchased by average consumers referred to as a "basket of goods" excluding eight of the items contained in "the basket" with the most volatile prices.
· See Also · Consumer Price Index
The amount by which the core CPI has risen over a specific period expressed as a percentage.
· See Also · Core CPI
A term referring to the types of banking products and services utilized by larger companies.
A person who guarantees repayment of a loan or mortgage in the event that the original borrower is unable to fulfill those repayment obligations.
· See Also · Guarantor
An acronym for "Certified Public Accountant", a popular designation for a certified account in non-commonwealth countries. In commonwealth countries the more popular term/designation is "Chartered Accountant". CPA is also an acronym for Canadian Payments Association.
An acronym for "Consumer Price Index".
· See Also · Consumer Price Index
An agency that researches and reports on the credit-worthiness of potential borrowers. The most popular credit bureaus in Canada and USA are Trans Union and Equifax.
A card bearing a unique magnetic stripe that is presented in lieu of cash by the cardholder when purchasing goods or services. Repayment for those goods or services is then made by the cardholder to the credit card company.
An insurance product that pays the principal of a debt upon the death or other specified event of the insured.
The maximum amount of credit allowed to an individual or organization.
A value assigned to the credit-worthiness of potential borrower based on the borrowers previous credit repayment history provided to potential lenders by a credit bureau.
A report issued by a credit bureau that illustrates the credit-worthiness of a potential borrower to potential lenders.
The assumed risk undertaken by a financial institution that a borrower may fail to meet their obligation to repay money loaned to that borrower by the financial institution.
A numerically based approach for evaluating a person or company's fability to repay a loan whereby a financial institution assigns different weight to various criteria to create their own "numeric score". As an example, somebody applying for a mortgage would be assigned X points for living in their current address for three years or more, Y points for their Beacon Score, Z points for their debit service ratio, etc.
A not-for-profit organization that is owned and operated by its members which provides banking and financial services to those members.
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This page was created and/or refreshed on May 17, 2013 @ 16:13:25
by Strategic Information Technology (SIT) Ltd., Stouffville, Ontario, Canada
The page subject is: Banking Software > Glossary of Terms - C