Monday, October 6, 2008

Financial Terms

reserve requirement

The reserve requirement (or required reserve ratio) is a bank regulation that sets the minimum reserves each bank must hold to customer deposits and notes.

accounts receivable

Money owed to a business by customers who have bought goods or services on credit. Accounts receivables are current assets that continually turn into cash as customers pay their bills.

securitize

Commerce. Convert (an asset, esp. a loan) into securities, usu. for the purpose of raising cash by selling them to other investors.

solvency

solvency is the ability of an entity to pay its debts with available cash.

credit crunch

Credit crunch is a term used to describe a sudden reduction in the general availability of loans (or "credit"), or a sudden increase in the cost of obtaining loans from the banks.

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