Associazione Bancaria Italiana ("Italian Banking Association")
ABS - Asset Backed Securities
Financial instruments whose yield and redemption are backed by the issuer's assets, which are set aside solely to fulfil the obligations incorporated in the instruments.
ALM - Asset & Liability Management
Integrated management of assets and liabilities aimed at allocating resources with a view towards optimising the ratio of risk to return.
Finance to support corporate acquisitions. The most common form of acquisition finance is the leveraged buy-out (cf. the entry for "Leveraged Finance").
Acronyms denoting companies or associations
ABI: Associazione Bancaria Italiana ("Italian Banking Association")
ECB: European Central Bank
CONSOB: Commissione Nazionale per le SocietÓ e la Borsa (?National Commission for Companies and the Stock Exchange?).
Form of remuneration of junior notes issued as part of securitisation transactions. In addition to a fixed coupon, these securities pay out periodic income (quarterly, half-yearly, etc.), the amount of which is a function of the income margin generated by the transaction (which in turn reflects the performance of the securitised assets).
Advanced IRB (Internal Rating Based)
An internal-rating method under the New Basel Accord, the IRB approach is divided into basic and advanced methods. The advanced method may only be used by institutions that meet minimum requirements that are stricter than those for the basic approach. Under the advanced method, all input estimates (PD, LGD, EAD, maturity) for the assessment of credit risk are made internally. Under the basic method, only PD is estimated by the Bank.
Annual percent rate conventionally used to express the cost of credit (TAEG)
This the rate that, on an annual basis, results in the following being equal in value: the sum of the current value of all amounts comprising the loan issued by the creditor and the sum of the current value of all loan payments (see the provision issued by the Ministry of the Treasury on 8.7.1992 concerning consumer credit).
Coordinator (coordination) of the organisational aspects of a complex financial transaction (e.g., acquisition finance or corporate finance). In the structured finance sector, the arranger coordinates the organizational aspects of a transaction, assuming various forms and under various types of engagement (mandated lead arranger, joint lead arranger, sole arranger, etc.).
Decisions to invest in markets, geographical areas, sectors, or products.
The activity of collecting savings.
The activity of managing the financial investments of third parties.
An association of companies (located or operating in Italy) engaged in asset management activity.
A national association of financial product placement and investment service companies.
In listed companies, the sum total of controls of company activity and accounting that are performed by internal structures (internal audit) or independent auditors (external audit).