vocabulary: investing banking lesson 8

acquisition

The act of one corporation acquiring another by purchasing its shares or by purchasing its assets.

bailout

A loan or offer of money to a business in order to save it from bankruptcy; a financial rescue.

boutique investment firm

A small investment firm that specializes in a limited number of services.

debt financing

A method of raising capital through the sale of bonds, bills, or notes.

equity financing

A method of raising capital through the sale of stock.

Federal Deposit Insurance
Corporation (FDIC)

An agency of the United States that promotes public confidence in the US financial system by insuring deposits in banks and thrift institutions for up to $250,000; by identifying, monitoring, and addressing risks to the deposit insurance funds; and by lim

Federal Reserve

The central bank of the United States. The "Fed" incorporates 12 Federal Reserve branch banks located in major cities across the nation, along with all national banks, all state-chartered commercial banks, and some trust companies. It helps to regulate th

Federal Reserve Act

A law passed by Congress in 1913, which created the central banking system of the United States.

financial holding company

A financial institution that may offer a broad range of banking-related services. The Federal Reserve Board regulates financial holding companies.

Glass-Steagall Act

A law passed by Congress in 1933, which prohibited commercial banks from engaging in investment banking services. The law also created the Federal Deposit Insurance Corporation (FDIC), which currently insures bank deposits up to $250,000. Also known as th

investment bank

A financial institution that provides investment-related services such as raising capital, trading securities, and facilitating mergers and acquisitions.

IPO (initial public offering)

The first time a company sells shares of its stock to the public.

maturity date

The date when a bond's principal is repaid to the investor.

mergers

The combining of two or more companies into one larger company.

Panic of 1907

A financial crisis that happened when the New York Stock Exchange crashed. Panic spread through the nation, resulting in many runs on banks and bank failures. It led to the creation of the Federal Reserve. Also known as the Bankers' Panic.

securities

Financial instruments such as stocks, bonds, and mutual funds that are traded on a stock exchange.

Securities Act of 1933

The first major law regarding the sale of securities. It required that companies register their securities sold to the public with the SEC and that investment bankers must provide full and accurate information related to new securities issues to potential

Securities and Exchange
Commission (SEC)

A federal agency that is responsible for regulating the securities industry and enforcing federal securities laws.

subprime mortgage crisis

A financial crisis that began as a result of the lending practices made to subprime borrowers. Mortgage delinquencies, home foreclosures, and a decline in home prices added to the crisis.

venture capital

Financing for new business ventures and/or start-up companies with a lot of growth potential. Because suppliers of venture capital understand the risks involved with new start-ups, the expected return can be quite high.