Austerity: a policy of deficit-cutting by lowering spending done by reducing the benefits and public services provided, sometimes coupled with increases in taxes to show long-term fiscal solvency to creditors.

Bank money: Banks create deposits, known as “bank money,” when they issue loans. They do this by simply crediting the borrower’s account with a new deposit. The total amount of bank money increases when a bank issues a loan. When a loan is paid off, that amount of bank money vanishes. 705

Bankrupt: unable to pay one’s debts, insolvent, having liabilities in excess of a reasonable market value of assets held.

Bear raid: the practice of targeting the stock of a particular company for take-down by massive short selling, either for quick profits or for corporate takeover

Base money: Fiat money held by the private sector is known as the monetary base or “base money.” The Fed issues base money when it buys securities from the public (mainly Treasury debt.) It pays by simply creating a deposit for the seller’s bank at the Federal Reserve Bank

Bills of credit: promissory notes or bills issued exclusively on the credit of the state.

Bill of exchange: an order made by one person to another to pay money to a third person. A common type today is the check. A check is a bill of exchange drawn on a banker and payable on demand.

BIS: The Bank for International Settlements ― a private banking organization headquartered in Basel, Switzerland. It regulates most of the world’s central banks, which control national currencies; it functions as a bank for the world’s central banks; sets rules, such as capital adequacy (Basel I,II, and III), for the world’s banks; and trades in bullion, currencies, etc., on its own account and in coordination with the IMF and other international financial organizations.

BRIC(S): an association of leading emerging economies. As of 2013, the group’s five members are Brazil, Russia, India, China, and South Africa.

Bubble: inflation in prices that is grossly out of proportion to underlying values.

Business cycle: a predictable long-term pattern of alternating periods of economic growth (recovery) and decline (recession).

Capitalization: market value of a company’s stock.

Capital requirements: standardized requirements in place for banks and other depository institutions, which determine how much capital must be held for a certain level of assets (loans) through regulatory agencies such as the Bank for International Settlements, Federal Deposit Insurance Corporation or Federal Reserve Board.

Cartel: a combination of producers of any product joined together to control its production, sale and price, so as to obtain a monopoly and restrict competition in that industry or commodity.

Central bank: a non-commercial bank, which may or may not be independent of government, having some or all of the following functions: conduct monetary policy, oversee the stability of the financial system, issue currency notes, act as banker to the government, supervise financial institutions and regulate payments systems.

Check clearing: The movement of a check from the depository institution at which it was deposited back to the institution on which it was written. The Federal Reserve operates a nationwide check-clearing system. According to About.com, “When banks clear checks, the money is taken from a checking account and sent to the check recipient’s account. The receiving bank requests funds from the check writer’s bank, and if all goes well the money is transferred.”

City of London: a London financial district, one of the leading centers of global finance.

Collateral: a borrower’s pledge to a lender of specific property to secure repayment of a loan.

Colonial scrip: a paper fiat money issued by the colonies in the pre-revolutionary era up to 1775. It was a quite different money from the Continental currency issued during the American Revolution to fund the war effort, which depreciated rapidly. Since colonial scrip was not backed by gold or silver, the colonies could control its purchasing power. It was a revolutionary concept in economics. The conventional European mercantilist system of money required governments to borrow from banks and pay interest for those loans, gold and silver being the only recognized forms of money. In this debt-based money system, banknotes were “bills of debt.” Colonial scrip consisted of “bills of credit” created by the government based on its own credit, so there was no interest to pay for the introduction of money into the economy. The system significantly defrayed the expenses of the colonial governments and helped maintain their prosperity.

Commodity money: money that gets its value from the commodity from which it is made. Commodity money consists of objects that have value in themselves as well as in their use as money.

Community currency: Unconventional, non-government currencies that are used by groups with a common bond, such as members of a locality or association. They operate independently of banks, with credits and debits generated by the members themselves as they trade with each other.

Compound interest: interest calculated not only on the initial principal but on the accumulated interest of prior payment periods.

Countercyclical: An economic or financial policy is called “countercyclical” if it works against the cyclical tendencies in the economy. That is, countercyclical policies are ones that cool down the economy when it is in an upswing, and stimulate the economy when it is in a downturn.

Currency: Money in any form when in actual use as a medium of exchange, facilitating the transfer of goods and services.

Debt deflation: monetary deflation (shrinkage of the money supply) and price deflation (falling prices) following the bursting of an asset bubble. When debt remains although asset values have fallen, as in the 2008 mortgage and banking crisis, people must borrow less and pay down debts rather than spend. This causes the money supply to shrink and a downward spiral of recession.

Default: the failure to pay back a loan.

Deficit spending: government spending in excess of what the government takes in as tax revenue.

Deficit hawks: people who place great emphasis on minimizing government deficits, in particular reducing deficits by cutting government spending rather than by raising taxes.

Deflation: A contraction in the supply of money or credit that results in declining prices; the opposite of inflation.

Demand deposits: bank deposits that can be withdrawn on demand at any time without notice. Most checking and savings accounts are demand deposits.

Derivatives: Derivatives are financial contracts – bets – made on changes in some underlying commodity price, asset price, rate, index or event. The thing bet on does not have to be owned. Derivatives are used to increase financial leverage—the ability to benefit from price changes with minimum investment. They are sometimes sold to function as insurance, as with credit default swaps. Although purported to be a means of decreasing financial risk, critics say they actually increase risk.

Discount: The difference between the face amount of a note or mortgage and the price at which the instrument is sold on the market.

Double-entry bookkeeping: a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.

Economic liberalism: the ideological belief in organizing the economy on individualist lines, such that the greatest possible number of economic decisions are made by private individuals and not by collective institutions. Economic liberalism opposes economic planning as an alternative to the market mechanism, and also generally opposes mixed economies.

European Central Bank (ECB): the central bank for the European Union (EU) and its currency, the euro. The ECB administers the monetary policy of the 17 EU member states, which constitute the Eurozone, one of the largest currency areas in the world. The ECB is thus one of the world’s most important central banks.

Eminent domain: the power to take private property for public use by a state or municipality following the payment of just compensation to the owner of the property. The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development.

Equity: ownership interest in a corporation.

Equity market (stock market): a public entity for the trading of company stock (shares, equities) and derivatives at an agreed price.

European Stability Mechanism (ESM): an international organization which provides financial assistance to members of the Eurozone in financial difficulty. The ESM was established in September 2012 to function as a permanent firewall for the Eurozone, with a maximum lending capacity of €500 billion. All new bailout applications and deals for any Eurozone member state with a financial stability issue would in principle thereafter be covered by ESM.

Fannie Mae and Freddie Mac (Federal National Mortgage Association and Federal Home Loan Mortgage Corporation): these were privately owned, government-backed GSEs (government–sponsored enterprises). At the height of the real estate bubble, they held approximately $5 trillion worth of mortgages, implicitly guaranteed by the government. In danger of imminent bankruptcy in 2008, they were taken over by the federal government and their losses were “socialized.”

FDIC (Federal Deposit Insurance Corporation): a U.S government-owned corporation operating as an independent agency created by the Glass-Steagall Act of 1933. It provides deposit insurance guaranteeing the safety of deposits in member banks, up to $250,000 per depositor per bank as of January 2012. The FDIC receives no Congressional appropriations. It is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. Under the leadership of Sheila Bair it played a leading role in financial sector clean-up after 2008.

Federal Funds rate: the overnight interest rate that banks charge each other.

Federal Reserve (“Fed”): the central bank of the United States, consisting of 12 regional banks, owned and controlled primarily by large private banks. The Fed functions as the bank for commercial and investment banks, holding their reserve deposits and clearing their checks. It is charged with regulating the U.S. money supply, mainly by buying and selling U.S. securities and setting the discount interest rate (the interest rate at which the Federal Reserve lends money to commercial banks). It has a dual mandate of controlling inflation and maximizing employment. Theoretically under the control of Congress, it is in fact not answerable to any branch of government, according to its former chairman Alan Greenspan.

Fiat money: money that derives its value from government regulation or law; state-issued money which is not convertible by law to any other thing (versus commodity money). The term derives from the Latin fiat ―“let it be done.”

Fiscal: having to do with government finance. Fiscal policy is the use of government taxation and spending to influence the economy.

Fractional reserve banking: a form of banking where a bank maintains a fraction of the total amount in its customers’ deposit accounts as reserves of cash or deposits at the central bank to satisfy demand from depositors. Funds deposited at a bank are mostly lent out, and the bank keeps a fraction (called the reserve ratio) of those funds as bank reserves. Some of the funds lent out are subsequently deposited with another bank, increasing the reserves and deposit liabilities of that second bank, and allowing further lending. With a required reserve ratio of 10 percent, the original deposit can theoretically be the basis for ten times its amount in subsequent loans by various banks. That is the theory, but in fact banks make loans without regard to their reserves, simply by advancing “bank credit” on their books. (See Chapter 2.)

Fraud: a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury.

Free trade: trade between nations unrestricted by any government controls. Critics say that in more developed nations, free trade results in jobs being “exported” abroad, where labor costs are lower; while in less developed nations, workers and the environment are exploited by foreign financiers, who take labor and raw materials in exchange Greenspan.

Fiat money: money that derives its value from government regulation or law; state-issued money which is not convertible by law to any other thing (versus commodity money). The term derives from the Latin fiat ―“let it be done.”

Fiscal: having to do with government finance. Fiscal policy is the use of government taxation and spending to influence the economy.

Fractional reserve banking: a form of banking where a bank maintains a fraction of the total amount in its customers’ deposit accounts as reserves of cash or deposits at the central bank to satisfy demand from depositors. Funds deposited at a bank are mostly lent out, and the bank keeps a fraction (called the reserve ratio) of those funds as bank reserves. Some of the funds lent out are subsequently deposited with another bank, increasing the reserves and deposit liabilities of that second bank, and allowing further lending. With a required reserve ratio of 10 percent, the original deposit can theoretically be the basis for ten times its amount in subsequent loans by various banks. That is the theory, but in fact banks make loans without regard to their reserves, simply by advancing “bank credit” on their books.

Fraud: a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury.

Free trade: trade between nations unrestricted by any government controls. Critics say that in more developed nations, free trade results in jobs being “exported” abroad, where labor costs are lower; while in less developed nations, workers and the environment are exploited by foreign financiers, who take labor and raw materials in exchange for paper money the national government could have created itself.

Globalization: integration of the world economy. Critics of globalization say we should not submit to the unconditional “free trade” mode of globalization, but rather pursue strategic integration, promoting our competitive self-interest as do nations like China.

Gold standard: a monetary system in which currency is convertible into fixed amounts of gold.

Greenbacks: fiat currency issued by the U.S government during and after the Civil War. The greenback movement was a campaign, largely by persons with agrarian interests, to maintain or increase the amount of paper money in circulation after the war. Between 1862 and 1865, the U.S. government had issued more than $450,000,000 in paper money not backed by gold (greenbacks) to help finance the Union cause in the American Civil War. After the war, fiscal conservatives demanded that the government retire the greenbacks, but farmers and others who wished to maintain high prices opposed that move.

Hedge funds: investment companies that use high-risk techniques, such as borrowing money and selling short, in an effort to make extraordinary capital gains for their investors.

Hyperinflation: a period of rapid inflation that leaves a country’s currency virtually worthless.

IMF (International Monetary Fund): A large international banking organization connected with the U.N. According to its site: “The IMF promotes international monetary cooperation and provides policy advice and technical assistance to help countries build and maintain strong economies. The Fund also makes loans and helps countries design policy programs to solve balance of payments problems when sufficient financing on affordable terms cannot be obtained to meet net international payments. IMF loans are short and medium term and funded mainly by the pool of quota contributions that its members provide.” Critics say it is a tool of the Western banking system that keeps countries in debt and colonized by Western corporations.

Inflation: a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. Monetarists claim that inflation is caused by excess government spending; others say that its primary cause is private financial activities – excess lending, leverage, low (or high) interest rates, Fed money creation, and monopolistic control of prices.

Investment banks: banks that focus on investing ― selling securities and derivatives, etc. Unlike commercial banks, they do not take deposits or make commercial loans; but the lines have blurred with the 1999 repeal of the Glass Steagall Act, which prohibited the same bank from taking deposits and underwriting securities. Leading investment banks include Merrill Lynch, Salomon Smith Barney, Morgan Stanley Dean Witter and Goldman Sachs.

Keiretsu: The keiretsu system is the framework of relationships in postwar Japan’s big banks and big firms. Related companies organized around a big bank (like Mitsui, Mitsubishi, and Sumitomo) which own equity in each other and the bank, and do business with each other. Similar economic groupings play a prominent role in the economies of Korea and China.

LBO (Leveraged Buyout): an acquisition, usually of a company, where the purchase price is financed through a combination of equity and debt and in which the cash flows or assets of the target are used to secure and repay the debt. As the debt usually has a lower cost of capital than the equity, the returns on the equity increase with increasing debt. The debt thus effectively serves as a lever to increase returns which explain the origin of the term LBO. Critics say LBOs are used to strip companies of assets, downsizing their workforces, eliminating their R and D, cutting wages, and confiscating their retirement funds, and thus have been a destructive, self-cannibalizing force in the U.S. economy.

Laissez-faire (French: “allow to do”): a policy of minimum governmental interference in the economic affairs of individuals and society. Laissez-faire was a political as well as an economic doctrine. The pervading theory of the 19th century was that the individual, pursuing his own desired ends, would thereby achieve the best results for the society of which he was a part.

Land bank: Land banks are governmental or non-governmental nonprofit entities that focus on the conversion of vacant, abandoned properties into productive use.

Leverage: a general term for any technique to multiply financial gains and losses. Common ways to attain leverage are borrowing money and using derivatives. The more a company borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result. Hedge funds often leverage their assets by using derivatives. Derivatives transactions allow investors to take a large price position in the market while committing only a small amount of capital; thus the use of their capital is leveraged.

Liability: an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future. Customer deposits are liabilities to banks, but the loans banks make are considered assets.

LIBOR (London Interbank Offered Rate): the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. LIBOR is widely used as a reference rate for many financial instruments in both financial markets and commercial fields around the world. In 2012, around 45 percent of prime adjustable rate mortgages and more than 80 percent of subprime mortgages were indexed to LIBOR. American municipalities also borrowed around 75 percent of their money through financial products that were linked to LIBOR. In June 2012, multiple criminal settlements by Barclays Bank revealed significant fraud and collusion by member banks connected to the rate submissions, leading to the LIBOR scandal.

Liquidity: the ability of an asset to be converted into cash quickly and without discount.

Money supply: the total amount of monetary assets available in an economy at a specific time.

Mercantilism: the economic policy that government control of foreign trade is of paramount importance. In particular, mercantilism demands a positive balance of trade. It dominated Western European economic policy and discourse from the sixteenth to late-eighteenth centuries. Its theory was developed in Renaissance Italy, was taken up by the British to build their empire, and was “a remarkably sophisticated attempt . . . to advance national economic development by means that would be familiar and congenial to the technocrats of twenty-first-century Tokyo, Beijing, or Seoul.” (Ian Fletcher, Free Trade Doesn’t Work, 2010.)

MERS (Mortgage Electronic Registration System): an American privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. The financial industry, eager to trade in mortgage-backed securities, needed to find a way around the recordation requirements and fees of counties and states, thus MERS was born to replace public recording of mortgage titles with a private system. By 2007, MERS registered some two-thirds of all the home loans in the United States.

Monetarism: A theory holding that economic variations within a given system, such as changing rates of inflation, are most often caused by increases or decreases in the money supply.

Monetize: to convert government debt from securities into currency that can be used to purchase goods and services.

Money market: the trade in short-term, low-risk securities, such as certificates of deposit and U.S. Treasury Notes.

Money supply: the entire quantity of bills, coins, loans, credit, and other liquid instruments in a country’s economy. “Liquid” instruments are those easily convertible to cash. The money supply has traditionally been reported by the Federal Reserve in three categories – M1, M2, and M3—although it quit reporting M3 after March 2006. M1 is what we usually think of as money – coins, dollar bills, and the money in our checking accounts. M2 is M1 plus savings accounts, money market funds, and other individual or “small” time deposits. M3 is M1 and M2 plus institutional and other larger time deposits (including institutional money market funds) and eurodollars (American dollars circulating abroad).

Montes pietatis: According to The Catholic Encyclopedia, “Montes Pietatis are charitable institutions of credit that lend money at low rates of interest, or without interest at all, upon the security of objects left in pawn, with a view to protecting persons in want from usurers. Being charitable establishments, they lend only to people who are in need of funds to pass through some financial crisis, as in cases of general scarcity of food, misfortunes, etc. On the other hand, these institutions do not seek financial profit, but use all profits that may accrue to them for the payment of employees and to extend the scope of their charitable work.” They were first established in medieval Italy and England and were precursors of public savings banks.

Moral hazard: the risk that the existence of a contract will change the behavior of the parties to it; for example, a firm insured for fire may take fewer fire precautions. In the case of banks, it is the hazard that they will expect to be bailed out from their profligate ways because they have been bailed out in the past.

Multiplier effect: In monetary macroeconomics and banking, the money multiplier measures how much the money supply increases in response to a change in the monetary base. The theory is that the Fed can control the money supply in a leveraged way through increasing or decreasing bank reserves, which form the basis a multiple of loans because of fractional reserve lending. Critics say it doesn’t work that way—that banks make loans regardless of reserves and the Fed is forced to supply them after the fact.

Non-performing loan: a loan that is in default or close to being in default. A loan is nonperforming when payments of interest and principal are past due by 90 days or more.

Notional value: on a financial instrument, the nominal or face amount that is used to calculate payments made on that instrument.

Oligarchy: government by the few, usually the rich, for their own advantage.

Open market operations: the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.

Overdraft: an overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.

Plutocracy: a form of government in which the supreme power is lodged in the hands of the wealthy classes; government by the rich.

Ponzi scheme: a form of pyramid scheme in which investors are paid with the money of later investors. Charles Ponzi was an engaging Boston ex-convict who defrauded investors out of $6 million in the 1920s, in a scheme in which he promised them a 400 percent return on redeemed postal reply coupons. For a while, he paid earlier investors with the money of later investors; but eventually he just

Populism: a political philosophy supporting the rights and power of the people in their struggle against the privileged elite.

Proprietary trading: a term used in investment banking to describe when a bank trades stocks, bonds, options, commodities, or other items with its own money as opposed to its customers’ money, so as to make a profit for itself. Although investment banks are usually defined as businesses which assist other business in raising money in the capital markets (by selling stocks or bonds), in fact most of the largest investment banks make the majority of their profit from trading activities.

Quantitative easing: an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets (loans or securities) from commercial banks and other private institutions in order to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to keep market interest rates at a specified target value. Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield (interest rate).

Real bills: a notice of payment due, typically sent by the wholesale merchant to the retail merchant along with his shipment of goods. The value of the real bill, unlike that of most securities, increases day-after-day till maturity, which is at most 91 days away. By that time the goods itemized on the bill will have been sold to the ultimate consumer and disbursement of the proceeds will be in progress. The face value of the bill is the amount to be paid upon maturity. The bill does not represent a loan transaction: the wholesaler is not lending and the retailer is not borrowing. The credit is an inseparable part of the transaction, as confirmed by centuries and centuries of merchant custom.710

Repurchase agreement (“repo”): The sale or purchase of securities with an agreement to reverse the transaction at an agreed future date and price. Repos allow the Federal Reserve to inject liquidity on one day and withdraw it on another with a single transaction.

Reserve currency: a currency that must be held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, and commodities such as oil, gold, etc. The U.S. dollar has been the world reserve currency in the post-World War II era, but its role is being weakened, notably by the BRIC countries that have made agreements to trade among themselves and with other countries without using the dollar, and by Iran.

Reserve requirement: the percentage of funds the Federal Reserve Board requires that member banks maintain on deposit at all times.

Reserves: banks’ holdings of deposits in accounts with their central bank, plus currency that is physically held in the banks’ vaults (vault cash).

Savings bank: a financial institution whose primary purpose is accepting savings deposits.

Self-liquidating loan: a type of credit that is repaid with money generated by the assets it is used to purchase. The repayment schedule and maturity of a self-liquidating loan are designed to coincide with the timing of the assets’ income generation. These loans are intended to finance purchases that will quickly and reliably generate cash.

Securitization: the bundling of pools of mortgages or other assets and turning them into “securities”― tradable documents evidencing an ownership interest in a portion of a debt, which can be sold off to investors.

Shadow banking system: bank-like activities, mainly lending, conducted through non-regulated entities, including hedge funds, money market funds, and securitization vehicles. These institutions fund themselves through short-term sources such as unsecured debt, asset-backed debt, commercial paper, repos, etc., and use this funding to provide leverage for various activities ranging from securities trading to corporate finance. The shadow banking system also refers to unregulated activities by regulated institutions. It has been common practice for investment banks to conduct many of their transactions in ways that don’t show up on their conventional balance sheet accounting and so are not visible to regulators. To the extent that investment banks do this, they can be considered part of the shadow banking system. The mortgage securitization process that led to the U.S. real estate bubble was dependent on the shadow banking system. Critics say that it is fundamentally flawed, and if left unregulated it will lead to another economic collapse.

Short sale: borrowing a security and selling it in the hope of being able to repurchase it more cheaply before repaying the lender. A naked short sale is a short sale in which the seller does not buy shares to replace those he borrowed.

Social credit: an economic philosophy developed by C.H. Douglas (1879–1952), a British engineer. Douglas observed that consumers collectively did not have enough income to buy back what they had made. He proposed to eliminate this gap between total prices and total incomes by augmenting consumers’ purchasing power through a National Dividend. Each citizen would have a beneficial, not direct, inheritance in the communal capital. Douglas said that Social Crediters want to build a new civilization based upon absolute economic security for the individual.

SOE (state-owned enterprise): a business that is owned by the government and operated for profit.

Sparkasse: Savings banks in German-speaking countries are called Sparkasse (pl: Sparkassen). They work as commercial banks in a decentralized structure. Each savings bank is independent, locally managed, and concentrates its business activities on customers in the oriented. Shareholders of the savings banks are usually single cities or numerous cities in an administrative district.

Specie: coin; coined money; precious metal (usually gold or silver) used to back money.

State-guided capitalism: commercial (profit-seeking) economic activity undertaken by the state, with management of production in a capitalist manner, even if the state is nominally socialist. State capitalism is usually characterized by the dominance of state-owned business enterprises..

Structural adjustment: a term used by the International Monetary Fund for the changes it recommends for developing countries that want new loans, including privatization, deregulation, and the reduction of barriers to trade; a package of “free market” reforms ostensibly designed to create economic growth to generate income to pay off accumulated debt.

Tally stick: In medieval England, a hardwood “tally stick” was used as evidence of a financial transaction.. When a financial transaction took place, the stick would be notched. These obligations could be sold and traded, their validity being demonstrated with the matching halves of the sticks. The system was fraud-proof, since only two pieces of wood in England matched each other, and neither party could add a notch without the alteration being obvious. Tally sticks could function as money. The system continued in England until the early 1800s.

TBTF ( too big to fail): a colloquial term used to describe certain financial institutions that are so large and so interconnected that their failure is widely held to be disastrous to the economy, requiring that they be supported by government when they face difficulty.

Time deposits: deposits that the depositor knows are being lent out and that he can’t have back for a certain period of time.

Transaction deposit: a term used by the Federal Reserve for checkable deposits (deposits on which checks can be drawn) and other accounts that can be used directly as cash without withdrawal limits or restrictions. They are also called demand deposits, since they can be withdrawn on demand at any time without notice. Most checking and savings accounts are demand deposits.

Usury: the practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.

Vulture capitalist: an investor who uses the clauses of an investment deal in a company to seize ownership of the company or valuable parts of it outright. Unlike a venture capitalist who invests in a company likely to succeed in the marketplace and hence show a profit to the investor, a vulture capitalist looks to invest in a firm likely to fail to show a profit in the near term, triggering the takeover clauses that would result in forfeiture of some or all the assets of the company. The intent is to sell off the constituent parts and thus show a profit, while destroying or hobbling the company.

WTO (World Trade Organization): a world-wide supra-national trade-regulating organization that promotes liberalization (neo-liberal policies such as privatization). The stated aims of the WTO are to promote free trade and stimulate economic growth, but critics say it widens the social gap between rich and poor that it claims to be fixing; steadfastly ignores the issues of labor and