LDA - Loss Distribution Approach
A model used to assess exposure to operational risk. It allows the amount of expected and unexpected loss to be estimated for all combinations of loss events and business lines.

Lead (co-lead) manager
The lead bank in a loan issue syndicate, responsible for dealing with debtors and choosing the co-lead managers and the other members of the underwriting syndicate in agreement with the issuer. It must also form the sales group, set the conditions of the transaction and manage its execution, often also undertaking to place the largest share on the market. It also keeps accounting records. It receives a special fee for these functions in addition to the reimbursement of expenses and other normal fees.

Lease
A contract by which one party (the lessor) grants the other (the lessee) the enjoyment of an asset for a given period of time. The asset is acquired or built by the lessor according to the lessee's preference and specifications. The lessee has the option of acquiring ownership of the asset under predetermined conditions at the term of the lease agreement.

Leveraged finance
A synonym of "acquisition finance", the term refers to the sum total of the transactions aimed at the transfer of ownership and control over a company through an organisational and financial formula that involves indebtedness by the company being acquired (a leveraged buy-out).

Liability management
Financial management of the structure of a company's indebtedness.

Loss Given Default (LGD)
Represents the estimated rate of loss in the event of default by the debtor.

Lower tier 2
Subordinated liabilities meeting the requirements for inclusion in tier 2 capital.