OFR_2016_Financial-Stability-Report

Mortgage Call Report
Mutual Fund
National Association of
Insurance Commissioners
(NAIC)
National Institute
of Standards and
Technology Cybersecurity
Framework
Net Asset Value (NAV)
Network
Notional Derivatives
Exposure
Operational Risk
Option
Originate
Over-the-Counter (OTC)
Derivatives
Own Risk and Solvency
Assessment (ORSA)
A quarterly report of mortgage activity and company information created by state
regulators and administered electronically through the Nationwide Mortgage
Licensing System & Registry (NMLS).
A pooled investment vehicle that can invest in stocks, bonds, money market instruments,
other securities, or cash; regulated by the SEC.
An organization that represents U.S. state insurance regulators. Through the NAIC,
regulators establish accreditation standards and practices, conduct peer review, and
coordinate their regulatory oversights of insurance companies.
Voluntary guidance, based on existing standards, guidelines, and practices, for critical
infrastructure organizations to better manage and reduce cybersecurity risk. The
framework focuses on using business drivers to guide cybersecurity activities and
considering cybersecurity risks as part of an organization’s risk management process.
The value of an entity’s assets minus its liabilities. For example, a mutual fund calculates
its NAV daily by dividing the fund’s net value by the number of outstanding
shares.
A model consisting of a set of nodes, or financial institutions, and a set of payment
obligations linking them, to show how financial interconnections can amplify market
movements.
The reference amount from which contractual payments will be derived on a derivatives
contract; generally not an amount at risk.
Risks occurring during the normal operation of a business, including, for example,
failed internal processes, legal risk, and environmental risk.
A financial contract granting the holder the right, but not the obligation, to engage
in a future transaction on an underlying security or real asset. For example, an equity
call option provides the right, but not the obligation, for a fixed period to buy a
block of shares at a fixed price.
To extend credit after processing a loan application. Banks, for example, originate
mortgage loans and either hold them until maturity or distribute them to other
financial market participants. The distribution can include a direct sale or a securitization
of a portion of the credit at the time of origination or later.
Deals negotiated privately between two parties rather than traded on a formal securities
exchange. Unlike standard exchange-traded products, OTC derivatives can be
tailored to fit specific needs, such as the effect of a foreign exchange rate or commodity
price over a given period.
An internal process undertaken by an insurer or insurance group to assess the adequacy
of its risk management and current and prospective solvency positions under
normal and severe stress scenarios.
100 2016 | OFR Financial Stability Report