What is the Libra Cryptocurrency? Libra was a cryptocurrency created by Facebook, renamed into Diem at the end of December 2020 and wound down in January 2022. The Libra cryptocurrency was intended to be used as a simple, low-fee global blockchain-based digital currency. It was envisioned to be digital money on your phone, which can…
What are Credit Card Asset-backed Securities? Credit card asset-backed securities (ABS) are fixed income bonds that are backed by the cash flow from credit cards. As companies collect on credit card payments, interest, and fees, cash flows that fund the principal and coupon payments of bonds are collected. The popularity of these securities began in…
What are Special Drawing Rights? Special Drawing Rights, often referred to as SDRs, are an interest-bearing international reserve asset used by the International Monetary Fund (IMF). The SDR is based on a basket of currencies and comes with the currency code, XDR, which it may also be referred to by. The SDR serves as the…
What is Fixed Income Interest Rate Risk? Fixed income interest rate risk is the risk of a fixed income asset losing value due to a change in interest rates. Since bonds and interest rates have an inverse relationship, as interest rates rise, the value/price of bonds falls. Interest rate risk can be measured by the…
What are Reinsurance Companies? Reinsurance companies, also known as reinsurers, are companies that provide insurance to insurance companies. In other words, reinsurance companies are companies that receive insurance liabilities from insurance companies. It is important to realize that, similar to any other businesses, insurance companies require protection against risk. Insurance companies manage their risk through…
What are Life and Health (L&H) Insurers? Life and health (L&H) insurers are companies that provide coverage on the risk of life and medical expenses incurred from illness or injuries. Life Insurance Life insurance offers coverage for the risk of loss of life. In other words, life insurance pays out a specified sum of money…
What are Fixed Assets? Fixed assets refer to long-term tangible assets that are used in the operations of a business. They provide long-term financial benefits, have a useful life of more than one year, and are classified as property, plant, and equipment (PP&E) on the balance sheet. Key Characteristics of a Fixed Asset The key…
What are Property and Casualty (P&C) Insurers? Property and casualty (P&C) insurers are companies that provide coverage on assets (e.g., house, car, etc.) and also liability insurance for accidents, injuries, and damage to other people or their belongings. Coverage for Property and Casualty Insurers Outlined in the Canadian Institute of Actuaries, property and casualty insurers…
What are Foreign Exchange Reserves? Foreign exchange reserves refer to foreign assets held by the central bank of a country. Foreign assets comprise assets that are not denominated in the domestic currency of the country. For example, US government bonds held by the Bank of Japan are foreign assets for Japan. For most central banks…
What is a Non-Recourse Loan? A non-recourse loan limits the assets of a borrower that a lender can pursue to recover the loan amount in the event of default. If the borrower defaults on the loan, the lender can only go after the asset(s) that were designated as collateral for the loan. The lender cannot…
