Banking Terms Based on the word / phrase from letter C (Part IV / End)

Banking Terms Based on the word / phrase from letter C (Part IV / End) :
Countertrade.

Or Return of Commerce, is a trading scheme or an international trade practice in which suppliers of goods / services in terms of agreeing a sale and purchase agreement to also make a purchase (reciprocity) and complied with certain requirements as a compensation and benefits to the buyer, so the suppliers of goods / services shall receive goods or provide other compensation to the buyer in return or payment of part or all of the goods / services they sell or trade for.
Goods or services that are exchanged by the supplier / seller of goods / services trade offs in the scheme consists of items of technology transfer, commercial rights, and services transferred through the export / import to equity participation.
Some variations in countertrade manifested in forms as follows:
(1) Barter.
Namely trade in "non-currency" of the oldest in the world, where trading is done through the exchange of goods / services with the goods / services directly and simultaneously with the value being equal or roughly comparable to the other without the use of payment instruments such as money. Barter in the form originally only performed by a single agreement without involving a third party. In a barter both sides have the same position, namely as a seller and buyer. In a further development barter or other instruments begin to involve third parties as collateral, namely by using:
a). Standby L / C
That the parties issuing L / C with mean when one is not satisfied with the goods / services obtained, it can melt the L / C opened by the partners.
b). Escrow Account
That is a special bank account as collateral, where revenues (convertible currency from exports) were collected. So the parties sell each other party goods trade and the results incorporated into the Escrow Account. Disbursement of Escrow accounts are set according to trading partner agreements.
(2) Switch Trade.
Ie third party authorized by the parties to sell goods / services are exchanged, so that the parties who exchange will obtain the desired currency
(3) Compensation
Namely an exchange of goods or services, where suppliers of goods / services agreed to pay part or all of the goods / services it sells the goods / services. The main form of direct compensation is called "buyback" while the indirect is "counterpurchase" (purchase returns).
(4) Counterpurchase
That is an agreement where the supplier of goods / services received in part or whole payment in the form of goods / services of another. For example the supplier agreed to buy or sell goods / services of other parties designated buyers.
(5) Offset.
That is a form of trade offs where the overseas supplier agreed to make investments or joint production or technology transfer country of the buyer of goods / services or providing equipment, or assistance necessary for the establishment of new industries with export destination, and or the construction or expansion of existing technologies and industrial capabilities.

Country Limit.

Trading is the maximum setting that can be done against a country, which aims to limit the risk of losses due to instability, social, political and economic country. Factors that are considered especially Social, Political, Economic and Banking of the country concerned.

Country Risk.

Is a risk of something that can happen in a country that could jeopardize the ability of borrowers to meet loan repayment obligations. Country Risk can be divided into:
- Sovereign (political) risk.
- Foreign exchange or transfer of risk.

Coupon (Coupon).

This term is used in fixed-interest bonds (interest bearing bonds), the coupons attached to bonds issued certificates. Each coupon represents a special interest payment at maturity of interest payments on that date has been set. To receive interest on the bonds, the coupon must be presented or submitted to the paying agent.

Courier Receipt.

Is the receipt from the courier service company for supply of goods or documents to be forwarded on request exporters. For buyers this is necessary in order to monitor the existence of the document and in preparation for taking the goods diimportnya. For example, L / C include the following requirements: "1 / 3 original B / L and one set of original documents must be sent directly to the applicant of al least one day after shipment by DHL courier service. Courier receipts and the beneficiary's certificate to this effect is required for negotiation.

Cover Note.

Is a written notice from the insurer stating that the goods are insured coverage has been closed by the insurer concerned. Cover note is an affirmation of the company while the insurance before the insurance policy or certificate issued.

CPT (Carriage Paid To).

The term is usually followed by the name of the destination, is a code in the International Commercial Terms (Incoterms), which means limits the responsibility of Seller / Seller for both the cost of export goods, transportation and limited risk to the goods loaded on transport (ships, trucks, trains fire and air ship) plus the cost of transport to the port of destination. In this case the Seller / Seller is responsible for preparing items to be ready for export. Thus the CPT with CFR. They differ only in conveyances CPT can be used for various types of transport equipment, while the CFR only by boat.
Limits of responsibility include:
1. Carriage arranged by seller
2. The risk of switching from seller to buyer when the goods have been delivered to the carrier.
3. Switching costs at the port of destination, buyer paying other expenses incurred outside the contract of carriage is borne by the seller.
4. When carriers used to transport additional to the agreed destination, the risk of switching when the goods are delivered to the carrier first.
5. Expenditures of the customs export (export clearance) is the responsibility of the seller. (9)
(Source: International Chamber of Commerce)

Credit Bureau (Credit Bureau).

Is an 'agency' who do research on credit information (credit information), maintain a complete file of the people / companies (customers) who obtain credit facilities from banks and prospective bank customers who apply for credit. Credit Bureau is a source of information about the credibility of a customer / potential customer. It is already prevalent in the Foreign a.l. in the U.S.. In most European countries, the term is more popular as the Credit Register (CR). In Indonesia in-introdusir by BI in terms of the Credit Information Bureau, see  Credit Information Bureau (BIK).

Credit Default Swap (CDS).

Is a way in credit risk transfer in which the party takes over the risk or investor (protection seller) only provides that transfer payments to the risk (protection buyer) if a credit event occurs on the reference assets. Meanwhile, the protection buyer only make payments on the guarantees given by the protection seller in the form of premiums.
Payment by the protection seller at the time the credit event can be done as follows:
1. Par value (par value) is exchanged for a physical value (physical delivery) of the reference assets.
2. In the form of compensation for the difference between par value (par value) and the return value (recovery value) of the reference assets in the event of credit events, or
3. Fixed amount that has been agreed previously.

Credit Line.

Is a facility provided to banks / financial institutions of non-bank counterparties both within and outside the country based on the calculation of the transaction needs to consider the level of bank risk / counterparty non-bank financial institutions.
Credit line is the limit set out to cover the transaction:
1). Treasury
Carry out the transactions Money Market (MM) and the Foreign Exchange (FX)
2). Commercial

Credit Linked Notes (CLN).

Are securities issued by the protection buyer to be paid at par value at maturity with terms no Credit Event occurs on the reference assets until the securities mature. In the event of a credit event the holder of melt CLN CLN CLN to the publisher (with a value among others for the difference between par value (par value) and the return value (recovery value) of the reference assets in the event of credit events).

Credit Rating.

The term Credit Rating can be understood from the definitions and expressions as follows:
1. Credit Rating is a comprehensive evaluation of the credibility (creditworthines) a debtor.
2. Credit Rating is a common measure of the possibility of failure of payment by the debtor to the fulfillment of obligations (general measurement of probability of default)
3. Credit Rating is a 'world language' to the credibility of (the world wide language of creditworthiness)
4. Credit Rating is a reflection of the ability of the debtor / obligor of its obligations in paying the debt principal and interest according to a set time.

Credit Risk Transfer (CRT).

Techniques in risk management is aimed at risk mitigation. CRT means transferring credit risk through various ways so that the original credit risk is a risk that must be borne by the company (bank) was transferred, or offset, or eliminated so that the credit risk for banks to fund a placement / provision of certain loans to an obligor / borrower particular, be nil or at least reduced or minimized. CRT can be applied to both individual obligor and to the portfolio in whole or in part.
The Credit Risk Transfer, will be at least 2 parties involved is a bank that will transfer the credit risk of the so-called 'Risk shedder "(the release of risk) is also called as the' protection buyer 'and others who take risks are referred to as the' Risk Taker 'called as well as the 'protection seller'. In addition there is also something that becomes the basis of the CRT is 'reference entity' or 'reference obligation' or 'reference assets' or 'underlying borrowers' credit risk is transferred / transferred. Sometimes it takes an intermediary in the transfer of risk in CRT structure known as a Special Purpose Entity (SPE)

Crisis Management Protocol (CMP).

Also called Crisis Management Protocol, is the rule (legal) for Bank Indonesia and the financial authorities (monetary and fiscal) to establish policies that will be taken to resolve the situation urgent / emergency situation in order to face the threat of economic / financial markets worsened. In the CMP established basic policies which should be taken immediately. The policy needs to be quickly resolved even in a matter of hours, because if late can destroy the financial markets. Some financial analysts think the CMP is required (up to April 2008 have not been there) because a new crisis arose when it's done a meeting to take action, feared would be too late and ineffective.

Cross Default.

Is a term in the syndicated loan, that the failure of the debtor in meeting its obligations on a member of the syndicate that provides financing will be considered a failure on all members of the syndicate that provides credit to the debtor


CSR (Corporate Social Responsibility).

Is a concept with which a company gives attention to the environment and society as integral to its business operations and interaction with stakeholders on a voluntary basis (on a voluntary basis).
The main functions of an enterprise is to create added value through the production of goods and services needed by society, by which generated profits for the owner (owners) as well as welfare for society, particularly with the creation of sustainable employment. However, pressure from society and the market gradually requires changes in value (values) and the horizon of business activities.

Currency Option.

Is a contract between two parties where the buyer (buyer / holder) option has the right to buy / sell a currency at the future with the agreed price, while the seller (seller / writer) has the obligation to sell / buy the currency is if the buyer carry out their rights. Rate used is called 'strike price' or 'exercise price'. In the transaction 'option', while the buyer has the right if the buyer-seller has an obligation to execute their rights.
There are two types of options as follows:
1. Call Option .. Namely the right to buy option contracts where the buyer pays a premium to the seller the option to acquire the right to buy one currency against another currency at a specified price during a certain period in the future
2. Put Option. Namely the right to sell the option contracts where the buyer pays a premium to the seller the option to acquire rights to sell one currency against another currency at a specified price during a certain period in the future. Party option seller (seller / writer) has the obligation (not right) to buy or sell a currency referred to in the contract if the buyer the option to execute their rights. Premium is compensation for the seller the option of losses that may arise if the buyer execute his rights.

Current Account.

This term is used in the context of macro economy, which is a measure of the flow of goods and services as well as income and investments (investment income) on a State to foreign countries, including goods exported and imported goods, international services transactions, dividends and interest paid and received . If a State receives more money from investments that entry as well as from sales of goods and services exported compared with all payments out of, then the condition is referred to as the surplus in current account. A State may be a surplus in merchandise trade deficit but a surplus was larger than the investment and services transactions (services), which overall makes the deficit on current account. Deficit in
transactions reflect the need for investment transactions and dividend payments of interest on debt and investment from outside (foreign debt)

Customer due diligence (CDD) and Enhance Due Diligence (EDD).

This term is related to the Anti-Money Laundering and Terrorism Financing Prevention, is an activity in the form of identification, verification, and monitoring by the Bank to ensure that customer transactions in accordance with customer profiles.
While the Enhanced due diligence (EDD) is the act CDD deeper by the Bank at the time associated with a relatively high-risk customers, including Politically Exposed Person (PEP) against the possibility of money laundering and terrorist financing

Cut Loss Limit.

Is the determination of a tolerable loss limit (in Pips / point) to avoid greater losses because flukstuasi rate that does not match the predictions.
The main consideration in setting this limit is turmoil in the bank's exchange rate and the courage to take risks, as reflected by the defined risk appetite.