Have you ever been confused by the jargon used by insiders to describe financial transactions? It’s easy to get the impression that some sellers go out of their way to confuse the issue.

Thisismoney.co.uk has a fairly comprehensive online A-Z guide to terms used in the financial services and banking sectors.

For example:

Credit Default Swap
A CDS or credit default swap is a contract issued by big City firms or funds that guarantees the holder will be covered if a particular company defaults on its debts. It is basically a type of insurance used by large investing institutions and reflects the cost of insuring their debts. It is used as one (controversial) way of measuring bank stability — the lower the figure, the stronger the bank.

Credit crunch
A credit crunch happens when banks hoard cash. If the supply of loans evaporates, the economic outlook quickly becomes bleak. The credit crunch that began in August 2007 was sparked by bad loans in America’s mortgage market — sub-prime borrowing. It can be measured by the level of Libor — the interbank lending rate.

Forex
The exchange rate is also known as the foreign-exchange rate, forex rate or FX rate. It is the rate between two currencies that specifies how much one currency is worth in terms of the other.

In the present financial climate it’s a good idea to scan through the list and update your knowledge of any unfamiliar terms, or those you hear frequently but wonder what they mean.

Equally, when a word or phrase suddenly arises, as “credit crunch” did on August 9 last year, this is a good place to go to check its meaning.

A-Z of Financial Terms and Jargon.