Banking & Finance Glossary—B
Banking & Finance Glossary—B

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Banking & Finance Glossary—B
  • Back office
  • Back to back transaction
  • Balloon repayment
  • Lexis®PSL resources
  • Base rate
  • Lexis®PSL resources
  • Bailment
  • Basis point
  • BBA
  • More...

Back office

Administrative departments in a bank which are involved in activities such as settlement and accounts

Back to back transaction

A transaction that has a mirror opposite transaction to it which replicates its obligations, liabilities and rights

Balloon repayment

Where the final repayment of principal in a loan transaction is substantially larger than earlier repayment instalments

Lexis®PSL resources

Repayment, prepayment and cancellation

Base rate

A bank base rate is a variable interest rate set by individual banks and used as a reference when lending to borrowers.

Where a bank accesses funds from money deposited by customers or raised from other investors, its cost of lending is:

  1. the amount it must pay to its depositors or other investors to attract their business (eg the interest it offers to its customers),  plus

  2. certain associated costs of lending (known as mandatory costs) 

Banks use those amounts to determine their 'base rates' which they then use to benchmark the interest they charge to their borrowers eg 'base rate plus 1%'.

Banks set their own individual base rates. In addition, the Bank of England has its own base rate, known as the Bank Rate. This determines the interest rate the Bank of England pays to commercial banks that hold money with it and typically influences individual bank base rates.

Lexis®PSL resources

Interest—funding rates and margin

Bailment

A bailment arises whenever one person (the b

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