Takeover
The acquisition of one business or company by another.

Target price
The price that an analyst believes a stock will reach in a certain time period.

Technical reserves
The assets held by an insurance company against future claims and losses.

Tier 1
The primary capital (Tier 1) includes the paid-in capital, the share premium reserve, reserves from retained earnings (including the IAS/IFRS reserve of primary application different from those included under the valuation reserves), net of own shares and intangible assets. Consolidated Tier 1 further includes minority interests.

Tier 2
The secondary capital (Tier 2) includes valuation reserves, hybrid capital instruments, subordinate liabilities, net of adjustments to loans subject to country risk covered with capital and of other negative elements.

Time value
Variation in the financial value of an instrument in relation to a different timeframe when certain monetary flows will become available or due.

TOE (Ton Oil Equivalent)
International unit of measure used when dealing with relevant quantities of energy. Every TOE equals the quantity of energy obtained by burning 1,000 kg of oil (41.8 GJ or 11.6 MWh).

Total capital ratio
Index of assets referred to the whole of the elements constituting statutory capital (Tier 1 and Tier 2).

Total return swap
A contract under which one party, usually the owner of the security or credit of reference, agrees to make periodic payments to an investor (protection seller) based on the capital and interest generated by the business. On the other side, the investor agrees to make payments based on a variable rate, as well as any depreciation of the business from the date of the contract.

Trading book
Usually referring to securities or in any case to financial instruments in general, it designates the portion of a portfolio earmarked for trading activity.

Underlying asset
The value of a derivative instrument depends on the performance of the underlying asset or security. These may be commodity derivatives such as gold, sugar, jute, pepper or coffee. They could also be financial in nature such as stocks, bonds, gilts, currencies and money market instruments.

Underwriting (commission)
Commission received in advance by the bank on the basis of the assumption of the underwriting risk associated with the granting of a loan.

Upper Tier 2
It designates the hybrid capitalisation instruments (for instance, perpetual loans) that represent the top-ranked portion of Tier 2.

VaR (Value-at-risk model )
A technique which uses the statistical analysis of historical market trends and the volatilities to estimate the likelihood that a given portfolio's losses will exceed a certain amount.

Vega01
Referred to a portfolio, it indicates the variation in value that it would undergo as a consequence of a one percent increase in the volatility of the underlying financial instruments.

Venture capital
Capital invested in a project in which there is a substantial element of risk, especially money invested in a new venture or an expanding business.

Volatility
A measure of the fluctuation in market price of a security. Volatility is calculated on the basis of the annualized standard deviation of daily change in price. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.

Warrant
Negotiable certificate giving the holder a right to buy (call warrant) or sell (put warrant) various underlyings at a given price and from a certain date. Warrants are listed on stock exchanges.

Wealth management
See "Asset management."

What-if
Form of analysis used in an attempt to describe what might be the dimensions of the reaction to variations in the basic parameters

Wholesale banking
A business activity mainly involving transactions of considerable importance concluded with primary opposite parties.

Yield
The annual rate of return on an investment, expressed as a percentage. In stocks and bonds, the amount of money returned to investors on their investments.

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