NATIXIS_PILLAR_III_2017_EN

APPENDIX Appendix 6: Glossary

Acronym/Term

Definition

Risk-based capital

RBC

Securities comprising tangible or intangible assets, movable or immovable assets, such as commodities, precious metals, cash, financial instruments or insurance policies. The amount of capital that banks are required to hold, i.e. 8% of risk-weighted assets (RWA). The securitization of an exposure that is already securitized where the risk associated with an underlying pool of exposures is tranched and at least one of the underlying exposures is a securitization position. The degree of risk, by type and by business, that the institution is prepared to take on in the pursuit of its strategic objectives. Risk appetite can be expressed through either quantitative or qualitative criteria. Document describing the interface between the organization’s key processes and the implementation of the governance that puts the RAS into action. Document setting out, in qualitative and quantitative terms, the risks that the bank is prepared to take.

Real security

Regulatory capital requirement Resecuritization

Risk appetite

Risk Appetite Framework (RAF) Risk Appetite Statement (RAS) Risk weight (RW)

The percentage value by which a given exposure is multiplied, used in the calculation of the corresponding risk-weighted assets.

Exposure value multiplied by its risk weight.

Risk-weighted asset (RWA)

Residential mortgage-backed security, i.e. a debt security backed by a pool of assets consisting of residential mortgage loans. Net income (excluding returns on hybrid securities recognized as equity instruments) divided by shareholders’ equity (restated for hybrid securities), used to measure the profit generated on capital.

RMBS

ROE (Return On Equity)

Réduction du temps de travail /Compensatory time off in lieu of overtime pay

RTT RW

Risk weight

Risk Weighted Assets, or risk-weighted EAD

RWA S&P

Standard & Poor’s

Approach used to measure credit risk as defined by EU regulations.

SA (Standardized Approach)

Société civile de placement immobilier /Real estate investment trust

SCPl SEC

US Securities and Exchange Commission

A transaction whereby credit risk on loan receivables is transferred to investors by an entity through the issuance of negotiable securities. This may involve the transfer of receivables (physical securitization) or the transfer of risks only (credit derivatives). Some securitization transactions are subordinated through the creation of tranches.

Securitization

Structured Export Finance Single Euro Payments Area

SEF

SEPA SFEF

Société de Financement de l’Economie Française (SPV set up by the French government to refinance French banks during the financial crisis).

Specialized Financial Services

SFS

An equity security issued by a corporation, representing a certificate of ownership and conferring on its possessor (the “shareholder”) proportional rights in the distribution of any profits or net assets as well as a voting right at the General Shareholders’ Meeting. Société d’Investissement France Active - The investment company through which France Active receives solidarity-based savings and invests them in the Social and Solidarity-Based Economy and socially innovative companies.

Share

SIFA

Refers to small-size market capitalization. Senior Management Committee Small and medium-sized enterprises Small and medium-sized industries

Small cap

SMC SME

SMI

Measures the ability of a business or an individual to repay its debt over the medium to long term. For a bank, solvency reflects its ability to cope with the losses that its risk profile is likely to trigger. Solvency analysis is not the same as liquidity analysis. The liquidity of a business is its ability to honor its payments in the normal course of its business, to find new funding sources and to achieve a balance at all times between its incomings and outgoings. For an insurance company, solvency is covered by the Solvency 2 Directive, see Solvency 2.

Solvency

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NATIXIS Risk report Pillar III 2017