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The Layman's Financial Crisis Glossary

The Layman's Financial Crisis Glossary

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Sub-prime mortgages

These carry a higher risk to the lender (and therefore tend to be at higher interest rates) because they are offered to people who have had financial problems or who have low or unpredictable incomes.

Swap

An exchange of securities between two parties. For example, if a firm in one country has a lower fixed interest rate and one in another country has a lower floating interest rate, an interest rate swap could be mutually beneficial.

Underwriters

When used of a rights issue, the institution pledging to purchase a certain number of shares if not bought by the public.

Unwind

To unwind a deal is to reverse it – to sell something that you have previously bought, or vice versa.

When administrators are called in to a bank, they must do the unwinding before creditors can get any money back.

Write-down

Reducing the book value of an asset to reflect a fall in its market value. For example, the write-down of a company’s value after a big fall in share prices. Courtesy of © 2008 YellowBrix, Inc.