JP Morgan Chase 2015 Annual Report Download - page 321

Glossary of Terms
JPMorgan Chase & Co./2015 Annual Report 311
Active foreclosures: Loans referred to foreclosure where
formal foreclosure proceedings are ongoing. Includes both
judicial and non-judicial states.
Allowance for loan losses to total loans: Represents
period-end allowance for loan losses divided by retained
loans.
Alternative assets: The following types of assets constitute
alternative investments – hedge funds, currency, real estate,
private equity and other investment funds designed to focus
on nontraditional strategies.
Assets under management: Represent assets actively
managed by AM on behalf of its Private Banking,
Institutional and Retail clients. Includes “Committed capital
not Called,” on which AM earns fees.
Beneficial interests issued by consolidated VIEs:
Represents the interest of third-party holders of debt,
equity securities, or other obligations, issued by VIEs that
JPMorgan Chase consolidates.
Benefit obligation: Refers to the projected benefit
obligation for pension plans and the accumulated
postretirement benefit obligation for OPEB plans.
Central counterparty (“CCP”): A CCP is a clearing house
that interposes itself between counterparties to contracts
traded in one or more financial markets, becoming the
buyer to every seller and the seller to every buyer and
thereby ensuring the future performance of open contracts.
A CCP becomes counterparty to trades with market
participants through novation, an open offer system, or
another legally binding arrangement.
Chase LiquidSM cards: Refers to a prepaid, reloadable card
product.
Client advisors: Investment product specialists, including
private client advisors, financial advisors, financial advisor
associates, senior financial advisors, independent financial
advisors and financial advisor associate trainees, who
advise clients on investment options, including annuities,
mutual funds, stock trading services, etc., sold by the Firm
or by third-party vendors through retail branches, Chase
Private Client locations and other channels.
Client assets: Represent assets under management as well
as custody, brokerage, administration and deposit accounts.
Client deposits and other third party liabilities: Deposits,
as well as deposits that are swept to on-balance sheet
liabilities (e.g., commercial paper, federal funds purchased
and securities loaned or sold under repurchase
agreements) as part of client cash management programs.
During the third quarter 2015 the Firm completed the
discontinuation of its commercial paper customer sweep
cash management program.
Client investment managed accounts: Assets actively
managed by Chase Wealth Management on behalf of clients.
The percentage of managed accounts is calculated by
dividing managed account assets by total client investment
assets.
Commercial Card provides a wide range of payment
services to corporate and public sector clients worldwide
through the commercial card products. Services include
procurement, corporate travel and entertainment, expense
management services, and business-to-business payment
solutions.
Core loans: Loans considered central to the Firm’s ongoing
businesses; core loans exclude loans classified as trading
assets, runoff portfolios, discontinued portfolios and
portfolios the Firm has an intent to exit.
Credit cycle: A period of time over which credit quality
improves, deteriorates and then improves again (or vice
versa). The duration of a credit cycle can vary from a couple
of years to several years.
Credit derivatives: Financial instruments whose value is
derived from the credit risk associated with the debt of a
third party issuer (the reference entity) which allow one
party (the protection purchaser) to transfer that risk to
another party (the protection seller). Upon the occurrence
of a credit event by the reference entity, which may include,
among other events, the bankruptcy or failure to pay its
obligations, or certain restructurings of the debt of the
reference entity, neither party has recourse to the reference
entity. The protection purchaser has recourse to the
protection seller for the difference between the face value
of the CDS contract and the fair value at the time of settling
the credit derivative contract. The determination as to
whether a credit event has occurred is generally made by
the relevant International Swaps and Derivatives
Association (“ISDA”) Determinations Committee.
Deposit margin/deposit spread: Represents net interest
income expressed as a percentage of average deposits.
Distributed denial-of-service attack: The use of a large
number of remote computer systems to electronically send
a high volume of traffic to a target website to create a
service outage at the target. This is a form of cyberattack.
Exchange-traded derivatives: Derivative contracts that are
executed on an exchange and settled via a central clearing
house.
Fee share: Proportion of fee revenue based on estimates of
investment banking fees generated across the industry from
investment banking transactions in M&A, equity and debt
underwriting, and loan syndications. Source: Dealogic, a
third party provider of investment banking fee competitive
analysis and volume-based league tables for the above
noted industry products.
FICO score: A measure of consumer credit risk provided by
credit bureaus, typically produced from statistical models
by Fair Isaac Corporation utilizing data collected by the
credit bureaus.
Forward points: Represents the interest rate differential
between two currencies, which is either added to or
subtracted from the current exchange rate (i.e., “spot rate”)
to determine the forward exchange rate.