Paid-in-Capital- Paid-in-capital the (equity) capital that the owners have invested in the corporation.

 

Pandemic Plan- A pandemic plan is a documented policy, plan or strategy within an organisation's business continuity planning framework addressing the possible event of a widespread outbreak of a dangerous infectious disease.

 

Parisian Options- Parisian options are essentially a crossover between barrier options and Asian options. They have predominant barrier option features in that they can be knocked in or out depending on hitting a barrier from under or above; they differ from standard barrier options in that extreme outlier asset movements will not trigger the Parisian, and for the trigger to be activated or extinguished, the asset must lie outside or inside the barrier for a predetermined time period t.

 

Passport Options- Passport or vacation options are not options which give you the opportunity to go on holiday, but rather, these options are options on the balance of a trading account. By this, we can consider a simple example where Alpha bank has a passport call on The trading account sold to them by Beta bank. If the trading account makes a profit, Alpha bank takes the trading gain, whereas Beta bank will bear the loss.

 

Payment System- A payment system is the infrastructure that settles financial and other transactions or transfers funds between financial institutions using established procedures and protocols.

 

People Risk- People risk is associated with a potential loss resulting from intentional or unintentional employee actions such as improper record keeping, misuse of information, or fraud.

 

Permanent Financing- Permanent financing provides capital either through equity or long-term debt to purchase, develop, and operate long-term fixed assets, such as factories, equipment and machinery.

 

Pillars of the Basel II Accord- The Basel II Accord consists of three pillars: Pillar 1 focuses on minimum capital requirements for the three major risks bank face: credit risk, operational risk and market risk; Pillar 2 focuses on supervisory review and processes for capital adequacy; and Pillar 3 focuses on market discipline and transparency.

 

Plain Vanilla- A plain vanilla is the standard type of a financial asset or instrument.

 

Point in Time (PIT) Capital Model- Point in Time capital models determine regulatory capital adequacy to reflect the risk, and the associated regulatory capital requirements, at specific points in time.

 

Portfolio- A portfolio is a collection of investments, such as stocks, bonds and cash equivalents, held by an institution or a private individual.

 

Position- A position is the amount of a security either owned (which constitutes a long position) or borrowed (which constitutes a short position) by an individual or by a dealer.

 

Potential Future Exposure (PFE)- Potential future exposure quantifies the counterparty credit risk by evaluating existing trades, positions, and other exposures in light of possible future variability in market prices, rates or yields during their likely lifetime.

 

Preferred Share- A preferred share has properties of both equity and debt, and are senior to common stock, but are subordinated to bonds; usually they do not carry any voting rights.

 

Present Value- Present value, the discounted value of future payments, adjusts values to reflect the time value of money and to make these values comparable.

 

Price of Credit- Price of credit is the rate charged for accessing and using borrowed funds.

 

Prime Lending Rate- The prime lending rate is the rate the banks typically charge their best customers.

 

Principal- The principal is the amount borrowed on a credit and excludes interest or other charges.

 

Private Offering- A private offering raises capital by selling new securities to a selected group of individuals, but not to the public.

 

Probabilistic Model- A probabilistic model incorporate the complex and interdependent behavior of complex assets and liabilities, and incorporate statistical and quantitaive modeling.

 

Probability of Default (PD)- The probability of default is the probability that a borrower defaults.

 

Project Finance- Project finance provide funds for the completion of large scale industrial or infrastructure projects where the assets of the project are pledged as collateral for the loan and the realized income or cash flow once the project is completed is expected to repay the loan.

 

Provision for Loan Loss- Provision for loan losses is a cost recorded on the income statement that represents funds set aside to absorb anticipated loan losses.

 

Public Borrower- A public borrower is typically a sovereign state, a provincial, or a local government including their sub-entities.

 

Public Offering- A public offering raises capital by selling new securities to the public.

 

Purchasing Power Parity (PPP)- Purchasing Power Parity is a theory of long-term equilibrium exchange rates where the relative value of two currencies is determined solely on the relative differences between price levels of two countries.

 

Put Option- Put option, a financial derivative, gives the right, but not the obligation to sell an agreed quantity of a particular commodity or financial instrument from the seller of the option at a certain time (expiration date) for a certain price (strike price); where the seller is obligated to buy the commodity or financial instrument should the buyer so decide.

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