Dictionary of Banking Terms [antikvár]

INTRODUCTIONby Ben WebermanBanking industry changes have been roaring along in the decade of the 1980s without slowing in the '90s. Integration of business, along with diversification and technological advance, has been the hallmark of progress. Soon it will be difficult to differentiate a commercial bank from a savings institution or a securities firm. Concurrently, financial institutions have entered an era of product innovation unprecedented in history.Banks can no longer be characterized as institutions that take deposits and make loans. In today's markét, credits are arranged in a variety of ways to provide the basic seasonal capital or capital asset needs. As an example, banks are arranging senior debt, intermedi-ate (or intermezzo) financing, and even subordinated credits. Mer-gers, leveraged buyouts, and takeovers can all be arranged through the banking system.Meanwhile, computer-generated information is being used to set terms for interest rate swaps and currency swaps. Borrowers and lenders can more easily move between floating rate and fixed rate, between dollars or pounds or any other combination of exchanges. Balance sheet assets, once fixed and illiquid, are now securitized so participations can be sold to other institutions or to the public.Lest it be forgottén, the sprawling, trillion-dollar mortgage markét is the ancestor of securitization, and is well represented in the üst of definitions. First there was pooling of residential mort-gages for resale to investors. Then pools of mortgage loans were separated into tranches, with each tranche possessing different payment characteristics, through the médium of Collateralized Mortgage Obligations (CMOs).CMOs and other derivative mortgage-backed securities (such as Interest Only and Principal Only securities) can trace their history to the creation of U.S. Treasury stripped bond issues. The first such securities were arranged by securities firms that bought large blocks of bonds and had a bank trustee separate all semiannual interest payments from the principal, or corpus.Even as banks are leaping into new fields, they are alsó merging into larger institutions. Régiónál banking companies are crossing state lines to jóin with other institutions of similar size, creating super-regional banks. The competition between these super-regionals and money center banks is on an equal footing.