EFTA01388580.pdf

The limits of monetary policy Glossary Here we explain central terms. A balance sheet summarizes a company's assets, liabilities and The ECB's main refinancing operations or MROs are one-week shareholder equity. liquiditµproviding operations in euro which serve to steer short- term interest rates, to manage the liquidity situation and to signal The Bank of Japan (8OJ) is the central bank of Japan. the monetary policy stance in the euro area. One basis point (bp) equals 1/100 of a percentage point. The European Central Bank (ECB) is the central bank for the Eurozone. Bunds are issued by Germany's federal government, most frequently with a maturity of 10 years. and are the German The Eurozone, also cal€ed the euro area, is a monetary union of 19 equivalent of U.S. Treasury bonds of the 28 European Union (EU) member slates which have adopted the euro as their common currency. The Bureau of Economic Analysis €s a U.S. government agency which produces economic statistics that enable government The Federal Reserve System or Fed, which serves as the U.S. and business decision makers to follow and understand the central bank, was established in 1913, consisting of the Federal performance of the nation's economy. Reserve Board with seven members headquartered in Washington, D.C., and twelve Reserve Banks located In major cities throughout Core inflation is a measure of inflation that excludes certain items the United States. that face volatile price movements, such as energy and food products. The federal funds rate Is the interest rate at which banks actively trade balances held at the Federal Reserve. Correlation is a statistical measure of how two securities move in relation to each other. Through fiscal policy, the government attempts to improve unemployment rates, control inflation, stabilize business cycles The Dax is a blue-chip stock-market index consisting of the and influence interest rates in an effort to control the economy. 30 major German companies trading on the Frankfurt Stock Exchange. Government bonds are issued by a government to support government spending, mostly in the country's domestic currency Deflation is a sustained decrease in the general price level of goods and are backed by the full faith of the government. and services. The Great Depression was the deepest and longest-lasting The deposit rate is the rate banks receive when they make economic downturn in the history of the Western industrialized overnight deposits with the ECB. world. In relation to currencies, depreciation refers to a loss of value The gross domestic product (GDP) is the monetary value of all the against another currency over time. finished goods and services produced within a country's borders in a specific time period. Devaluation is the forced reduction of the value of a currency against other currencies. Headline inflation is the raw inflation figure based on the consumer price index (CPI) and not adjusted for seasonality or fnr the often Disinflation is a decrease in the rate of inflation. volatile elements of food and energy prices. Diversification refers to the dispersal of investments across asset Helicopter money refers to a large sum of money being directly or types, geographies and so on with the aim of reducing risk or indirectly distributed to the public by the central bank in order to boosting risk-adjusted returns. stimulate the economy. Duration is a measure of the sensitivity of the price of a fixed- High yield (HY) is often used as a shorthand for high-yield bonds. income investment to a change in interest rates and Is calculated on the basis of present value, yield, coupon, final maturity and call Inflation is the rate at which the general level of prices for goods features. and services is rising and, subsequently, purchasing power is falling. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0092215 CONFIDENTIAL SDNY_GM_00238399 EFTA01388580