What Is a Bank? A bank is a financial institution that is licensed to accept checking and savings deposits and make loans. Banks also provide related services such as individual retirement accounts (IRAs), certificates of deposit (CDs), currency exchange, and safe deposit boxes. There are several types of banks including retail banks, commercial or corporate
What Is the Bank Bill Swap Bid Rate (BBSY)? The Bank Bill Swap Bid Rate (BBSY) is an Australian benchmark interest rate quoted and dispersed by the data provider Thompson Reuters Information Service. The BBSY is typically used by financial institutions or corporations engaging in interest rate swaps and related transactions. Key Takeaways BBSY, or
What Is a Bank Confirmation Letter (BCL)? A bank confirmation letter (BCL) is a letter from a bank or financial institution confirming the existence of a loan or a line of credit that has been extended to a borrower. The letter officially vouches for the fact that the borrower—typically an individual, company, or organization—is eligible to
What Is the Bank Secrecy Act (BSA)? Also known as the Currency and Foreign Transactions Reporting Act, the Bank Secrecy Act (BSA) is U.S. legislation created in 1970 to prevent financial institutions from being used as tools by criminals to hide or launder their ill-gotten gains. The law requires banks and other financial institutions to provide
What Is the Bank Bill Swap Rate (BBSW)? The Bank Bill Swap Rate (BBSW), or Bank Bill Swap Reference Rate, is a short-term interest rate used as a benchmark for the pricing of Australian dollar derivatives and securities—most notably, floating rate bonds. Key Takeaways The Bank Bill Swap Rate (BBSW) is a short-term interest rate used
What Are Back-to-Back Letters of Credit? Back-to-back letters of credit consist of two letters of credit (LoCs) used together to finance a transaction. A back-to-back letter of credit is usually used in a transaction involving an intermediary between the buyer and seller, such as a broker, or when a seller must purchase the goods it
What Is a Back-to-Back Loan? A back-to-back loan, also known as a parallel loan, is when two companies in different countries borrow offsetting amounts from one another in each other’s currency as a hedge against currency risk. While the currencies and interest rates (based on the commercial rates of each locale) remain separate, each loan
What Is a Backup Line? A backup line is a line of credit (LOC) that protects investors in the event that a company defaults on its commercial paper: a type of unsecured, short-term debt instrument issued by corporations typically to finance payroll, accounts payable and inventories, and meet other short-term liabilities. The company issuing the paper pays a bank a
What Is Back Up The Truck? Back up the truck is slang that refers to the purchase of a large position in a stock or other financial asset by an investor or trader. Typically, when an individual is willing to back up the truck on a financial asset, this implies an extremely bullish outlook on
What Is Backup Withholding? Backup withholding is a tax that is levied on investment income, at an established tax rate, as the investor withdraws it. For payments not subject to withholding, payers are required to withhold the tax. Backup withholding helps to ensure that government tax-collecting agencies, such as the Internal Revenue Service (IRS) or Canada
