| BUSINESS DICTIONARY |
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| [C] California Economic Development Lending Initiative - CEDLI This is a statewide community development corporation that provides financing to serve a range of community economics development needs, including small businesses, non-profit lenders, and community real estate projects. capacity utilization rate The percentage of the economy's total plant and equipment that is currently in production. Usually a decrease in this percentage signals an economic slowdown, while an increase signals economic expansion. capital market The market in which corporate equity and longer-term debt securities (those maturing in more than one year) are issued and traded. capital market rates See long-term interest rates. Cash Management Bills - CMB Very short maturity bills that the Treasury sells on an irregular basis to bridge low points in the Treasury's cash balance. cash method of accounting A system, used especially in computing income tax, in which income is not credited until it is actually or constructively received and expenses are not charged until they have been paid; to be distinguished from the accrual method, in which income is credited when the legal right to the income occurs and expenses are charged when the legal liability becomes enforceable. cease-and-desist order An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company, or a depository institution official to terminate unlawful, unsafe, or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts. central bank The principal monetary authority of a nation, a central bank performs several key functions, including issuing currency and regulating the supply of credit in the economy. The Federal Reserve is the central bank of the United States. central bank intervention The buying or selling of currency, foreign or domestic, by central banks, in order to influence market conditions or exchange rate movements. certificate of deposit - CD A form of time deposit at a bank or savings institution which cannot be withdrawn before a specified maturity date without being subject to an interest penalty for early withdrawal. Small-denomination CDs are often purchased by individuals. Large CDs of $100,000 or more are often in negotiable form, meaning they can be sold or transferred among holders before maturity. check clearing The movement of checks from the banks or other depository institutions where they are deposited back to those on which they are written, and funds movement in the opposite direction. This process results in credits to accounts at the institutions of deposit and corresponding debits to accounts at the paying institutions. The Federal Reserve participates in check clearing through its nationwide facilities, though many checks are cleared by private sector arrangement. clearinghouse An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers. contractionary monetary policy A policy to restrict the growth of money and credit in the economy. See also monetary policy. contemporaneous reserve accounting An accounting method that allows member banks of the Federal Reserve a one-day lag when calculating their required reserves and reserves held as vault cash. Except for the one-day lag, assets and liabilities used in calculating reserves and required reserves are those of the same week. correspondent bank A bank that accepts deposits of and performs banking services for other depository institutions. cosigner A term referring to a person, other than the principle borrower, who signs for a loan. The cosigner(s) assumes equal liability for the loan. |
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