Page 13 - PRIAA Glossary

BANKER’S ACCEPTANCE
A short-term credit instrument used in the international commodity markets. Issued by a non-financial firm, the payment of the acceptance is guaranteed by a bank.
BANKRUPTCY
A credit event applicable in the majority of credit default swaps where the reference entity is a corporate (bankruptcy does not apply to sovereign reference entities). Bankruptcy events include the reference entity being dissolved, becoming insolvent, making an arrangement for the benefit of its creditors, being wound up, seeking the appointment
of an administrator, liquidator, conservator or other similar official or having a judgment of insolvency made against it. See also credit event.
BARRIER OPTION
An option whose final exercise depends upon the path taken by the price of an underlying instrument. For a “knock-out” barrier option, the option is cancelled if the underlying price crosses a predetermined barrier level. For a “knock-in” barrier option, the option becomes available-for-exercise if the underlying price crosses a predetermined barrier level. See also ““knock-in/out”.
BASE RATE (UK)
The interest rate set by the Bank of England for secured overnight lending.
BASEL COMMITTEE OF BANKING SUPERVISION
A forum for the cooperation and coordination of bank-related supervisory matters.
BASEL III
Global regulatory standards designed by the Basel Committee on Banking Supervision. Also referred to as Third Basel Accord, it provides a regulatory framework
to strengthen global capital and liquidity. It focuses on stress testing a bank’s ability to withstand economic and financial stress, improve risk management and strengthen transparency and disclosures.
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