What Is the Bank Discount Rate? The bank discount rate is the interest rate for short-term money market instruments like commercial paper and Treasury bills. The bank discount rate is based on the instrument’s par value and the amount of the discount. The par value is the face value or original value of the investment
What Is a Bank Endorsement? A bank endorsement is a guarantee by a bank confirming that it will uphold a check or other negotiable instrument, such as a banker’s acceptance, from one of its customers. This assures any third-party that the bank will back the obligations of the creator of the instrument in the event
What Is a Bankers’ Bank? A bankers’ bank is a specific type of bank that a group of larger, more established banks create. Bankers’ banks exist for the purpose of servicing the charter banks that founded them. While their banking services are not generally open to the public in any fashion, these institutions are designed
What Is a Banker Trojan? A Banker Trojan is a malicious computer program designed to gain access to confidential and/or material information stored or processed through online banking systems. This type of computer program is built with a backdoor, allowing outside parties to gain access to a computer, or it may instead copy a bank
What Is a Bank Examination? A bank examination is an evaluation of the financial health and resilience of a bank. Bank examinations are primarily concerned with the strength of the bank’s balance sheet. However, they also include a review of its regulatory compliance and internal controls. In the United States, examinations of national banks are
What Is Bank Failure? A bank failure is the closing of an insolvent bank by a federal or state regulator. The comptroller of the currency has the power to close national banks; banking commissioners in the respective states close state-chartered banks. Banks close when they are unable to meet their obligations to depositors and others.
What Are Bank Fees? The term bank fees refers to any charges imposed by financial institutions on their personal and business customers for account set-up, maintenance, and minor transactional services. These fees may be charged on a one-time or ongoing basis. Examples of bank fees range from account maintenance charges, withdrawal and transfer fees, automated
What Is a Bank Giro Transfer? A bank giro transfer is a method of transferring money by instructing a bank to directly transfer funds from one bank account to another without the use of physical checks. Bank giro transfers are predominantly used in European countries, such as Germany, Austria, the Netherlands, and Sweden, as well
What Is a Bank Guarantee? A bank guarantee is a type of financial backstop offered by a lending institution. The bank guarantee means that the lender will ensure that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. A bank
What Is a Bank Holiday? A bank holiday is a business day during which financial institutions are closed. Bank holidays are most relevant for physical branch locations because many online banking services continue to operate. The dates are major federal holidays when most financial institutions—stock exchanges, brokerage firms, and traders—also take the day off. Although
