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THE BANK FOR CORPORATES
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Glossary
Trading book. Items of a bank’s own trading with financial instruments that it holds for the purpose of resale or has taken over in
order to make short-term use of existing or expected differences between purchase and selling prices or fluctuations in prices and
interest rates. Items outside the trading book are counted in the banking book.
Value-at-risk concept. Procedure for the calculation of a potential for loss arising out of changes in fair prices. Value at risk states
the loss that will not be exceeded under normal market conditions on the assumption of previously determined probability (confidence
level) within a defined liquidity period (for example, one day).
Venture capital. Equity financing directed towards young or newly established businesses with extraordinary growth potential.
Volatility. Index of the change of interest rates or prices over time, in mathematical terms the annualized standard deviation of
interest rates or prices.