Financial Institutions and Terms: Retail Banks, Investment Banks, and More

Financial Institutions

Retail Banks: issuing shares or bonds-receiving deposits

Building societies: arranging mergers

Insurance companies: offering life insurance-providing pensions

Investment Banks: arranging or fighting takeover bids- arranging mortgages- giving financial advice to companies

Financial Terms

• Mortgage: is a loan to buy property
• Deposit: money you put in the bank
• Pension: money paid to retired person
• Stocks or Shares: securities representing part ownership of a company
• Capital: money invested in a business
• Bonds: are interest paying securities issues by companies that need to borrow money
• Takeover: company gains control of another one by buying its stocks
• Merger: two formerly separate companies join together

Legal and Financial Terms

• Conglomerates: groups of companies that have joined together
• Depositors: people who place money in bank accounts
• Deregulated: abolished or ended rules and restrictions
• Fines: sums of money paid as penalties for breaking the law
• Prohibited: made it illegal to do something
• Regulation: control of something by rules or laws
• Repealed: cancelled or ended (a law)
• Underwriting: guaranteeing to buy a company's newly issued stocks if no one else does

Legal and Financial Obligations

• Permission: can (informal)- allowed
• Obligation: have to- need to. Must (formal)
• Prohibition: can’t-mustn’t-not allowed
• No Obligation-Not Necessary: don't have to- don't need to

Accounting Terms

• Assets: anything owned by a company-cash, buildings, machines, etc
• Tax Accounting: calculating how much tax an individual or a company should pay-or trying to reduce this figure
• Auditing: checking and evaluating financial records
• Cost Accounting: determining the unit cost of a manufactured product, including indirect costs
• Financial Accounting: keeping financial records and preparing financial statements
• Liabilities: money that a company will have to pay to someone else- bills, debts, interest, taxes
• Bookkeeping: recording transactions (purchases and sales) in ledgers
• Income: the money that a company receives from supplying goods or service
• Expenditure: the money that a company spends
• Management Accounting: the use of a company's accounting data by its managers for planning and control
• Bulls: name for investors who buy shares because they expect their price to rise
• Bears: name for shareholders who sell because they expect the price to fall
• Bubble: period of rapidly rising share prices, followed by a quick collapse