Systemic riskIn finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to the risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries".
Deposit insuranceDeposit insurance or deposit protection is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of a financial system safety net that promotes financial stability. Banks are allowed (and usually encouraged) to lend or invest most of the money deposited with them instead of safe-keeping the full amounts (see fractional-reserve banking).
Transaction accountA transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account or bank account held at a bank or other financial institution. It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct. Access may be in a variety of ways, such as cash withdrawals, use of debit cards, cheques and electronic transfer.
Savings and loan crisisThe savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of 32% (1,043 of the 3,234) of savings and loan associations (S&Ls) in the United States from 1986 to 1995. An S&L or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members (a cooperative venture known in the United Kingdom as a building society).
Bank of EnglandThe Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of the United Kingdom, it is the world's eighth-oldest bank. It was privately owned by stockholders from its foundation in 1694 until it was nationalised in 1946 by the Attlee ministry.
Multiplier (economics)In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable x changes by k units, which causes another variable y to change by M × k units. Then the multiplier is M. Two multipliers are commonly discussed in introductory macroeconomics. Commercial banks create money, especially under the fractional-reserve banking system used throughout the world.
Credit theory of moneyCredit theories of money, also called debt theories of money, are monetary economic theories concerning the relationship between credit and money. Proponents of these theories, such as Alfred Mitchell-Innes, sometimes emphasize that money and credit/debt are the same thing, seen from different points of view. Proponents assert that the essential nature of money is credit (debt), at least in eras where money is not backed by a commodity such as gold.
Sveriges RiksbankSveriges Riksbank, or simply the Riksbank, is the central bank of Sweden. It is the world's oldest surviving central bank, and the fourth oldest bank in operation. The first part of the word riksbank, riks, stems from the Swedish word rike, which means realm, kingdom, empire or nation in English. A literal English translation of the bank's name could thus be Sweden's Realm's Bank. The bank, however, doesn't translate its name to English but uses its Swedish name the Riksbank also in its English communications.
Austrian business cycle theoryThe Austrian business cycle theory (ABCT) is an economic theory developed by the Austrian School of economics about how business cycles occur. The theory views business cycles as the consequence of excessive growth in bank credit due to artificially low interest rates set by a central bank or fractional reserve banks. The Austrian business cycle theory originated in the work of Austrian School economists Ludwig von Mises and Friedrich Hayek. Hayek won the Nobel Prize in Economics in 1974 (shared with Gunnar Myrdal) in part for his work on this theory.
Broad moneyIn economics, broad money is a measure of the amount of money, or money supply, in a national economy including both highly liquid "narrow money" and less liquid forms. The European Central Bank, the OECD and the Bank of England all have their own different definitions of broad money. The European Central Bank considers all monetary aggregates from M2 upwards to be part of broad money. Typically, "broad money" refers to M2, M3, and/or M4. The term "narrow money" typically covers the most liquid forms of money, i.
