Page 69 - PRIAA Glossary

F
FAILURE TO PAY (FTP)
A credit event that is triggered if a reference entity fails to make interest or principal payments due under the terms
of one or more of its obligations. FTP is usually subject to a minimum payment requirement and a grace period. See also “credit event”.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
An independent agency, created by the US Congress, to maintain stability in the market. It provides deposit insurance which guarantees the safety of the deposits in member banks.
FEDERAL DISCOUNT RATE
An interest rate set by the US Fed for secured lending to US banks. The rate depends on the length of the loan.
FEDERAL FUNDS RATE
The interest rate used for overnight uncollateralised loans between US banks. The US Fed sets the federal funds target rate, and transactions in federal funds yield the fed funds effective rate.
FEDERAL RESERVE SYSTEM
The central banking structure of the United States, created in 1913. The system is composed of a Board of Governors, the Federal Open Market Committee, 12 Federal Reserve Banks located in major US metropolitan areas and many private US banks. The primary functions of the Federal Reserve System include addressing banking panics, serving as a central
bank to the US, overseeing the nation’s money supply and maximising employment while keeping prices stable.
FILL
To complete a customer’s order to buy or sell a security. This is a type of order or transaction that requires a transaction to be filled completely or be cancelled.
67
F