Glossary

Backtesting compares what a risk model predicted with what actually happened, to check whether the model is reliable enough to keep using.

A bank run happens when many depositors try to withdraw their money at the same time because they fear the bank will fail, which can turn a worry into an actual collapse.

BEPS describes tax planning by multinational groups that uses gaps and mismatches between countries' tax rules to move profits to low-tax places, shrinking the tax paid where the real activity occurs.

The Basel Accords are international standards for bank regulation from the Basel Committee on Banking Supervision, a group of central banks and supervisors. They set minimum rules on capital, liquidity and risk management, and countries adopt them into their own law.

Basel III is the set of international banking standards agreed after the 2008 financial crisis. It tightens bank capital, adds a simple capital-to-exposure ratio and capital buffers, and introduces global liquidity rules.

The Basel operational risk event types are seven standard categories used by banks to classify operational losses by cause, such as internal fraud, external fraud, system failures and process errors.

The Basel pillars are the three parts of the Basel framework: Pillar 1 sets minimum capital, Pillar 2 adds supervisory review and the bank's own assessment, and Pillar 3 requires public disclosure.

Basis risk is the chance that a hedge does not move in step with the exposure it is meant to offset, leaving a loss even though the hedge was put in place.

Bear raiding is a manipulation tactic in which traders push down a share’s price, often through heavy short selling or negative rumours, so as to buy it back cheaply or profit from the fall.

Bearer instruments are financial documents, such as bearer cheques, bonds or notes, owned by whoever physically holds them, with no name recorded, which makes them easy to pass on and hard to trace.

Bearer shares are company shares, usually issued as paper certificates, owned by whoever holds the certificate, with no owner’s name recorded in the company’s register.

A benami transaction is one where property is held in another person's name, the benamidar, while the real owner pays for it and enjoys the benefit. The word comes from Persian and means "without a name".

Benchmark manipulation is the rigging of a published reference rate or price, such as an interbank interest rate, by submitting false inputs or colluding, so that contracts tied to it settle in the manipulator’s favour.

A beneficial owner is the individual who ultimately benefits from, or has the final say over, a customer, however many companies, trusts or nominees sit in between. No register need carry their name.

Beneficial ownership transparency is the policy aim, and the laws behind it, that authorities and in some places the public can find out which real people stand behind companies, trusts and similar structures.

Best execution is the duty of a broker or investment firm to work to obtain the best overall result for clients when it carries out their orders, weighing price alongside other factors.

Bid rigging is an agreement among bidders to decide in advance who will win a tender, so that the buyer believes it is getting real competition when it is not.

Binding corporate rules are internal data protection policies, approved by a regulator, that every company in a multinational group must follow so personal data can move between its entities in different countries.

Biodiversity risk is the chance of financial or operational loss when ecosystems decline and the species, soil, water and pollination services a business relies on weaken, or when rules and markets react to that decline.

The Black Market Peso Exchange is a trade-based laundering system in which a broker buys drug dollars from traffickers for pesos, then uses them to pay for goods shipped to importers who repay the broker in pesos.

Black money is income or wealth that has not been declared to tax authorities or that comes from illegal activity, and so sits outside the formal, taxed economy.

A black swan event is a rare, hard-to-predict event with extreme impact, which people explain after it happens as though it had been predictable all along.

A blackout period is a set time during which certain people, usually insiders, are barred from trading a company's securities, to prevent misuse of undisclosed information.

Blockchain analytics is the use of software to trace and interpret transactions on public blockchains, linking wallets to services or people, to investigate crime, screen transfers and assess crypto risk.

Blocking and rejecting are the two ways a firm handles a sanctioned payment: blocking freezes the funds and holds them, while rejecting refuses to process the payment and returns it or leaves it unprocessed.

A blocking statute is a law that stops people and firms in one country from complying with another country's sanctions, usually because that country sees those sanctions as an overreach of its jurisdiction.

A board charter is a written document setting out the board's role, powers, makeup and ways of working, including what it keeps for itself and what it hands to committees and management. Terms of reference is the same idea.

Board committees are smaller groups of directors, appointed by the full board, that study specific areas such as audit, risk, pay or appointments and report back with findings or recommendations.

Board evaluation is a periodic review of how well the board, its committees and individual directors perform, covering skills, behaviour, decision quality and use of time, with agreed actions to improve.

Board minutes are the written record of what a board of directors discussed, decided and assigned at a meeting, kept as formal evidence of how the company was governed.

Boiler room fraud is an investment scam in which callers, working from a high-pressure sales operation, push people to buy worthless or overpriced shares and other assets by phone, often unsolicited.

Bow-tie analysis is a diagram that places one risk event in the centre, with its causes and preventive controls on the left and its consequences and recovery controls on the right.

Bribery is offering, giving, asking for or accepting something of value to influence how a person carries out their public or business duties, in a way that is dishonest or breaches trust.

The Bribery Act is the 2010 United Kingdom law that criminalises giving and taking bribes, bribing foreign public officials, and commercial organisations failing to prevent bribery by those acting for them.

The burden of proof is the duty to prove a disputed fact, and it fixes which side loses if the evidence is not strong enough to meet the required standard.

Business continuity management is the ongoing programme an organisation runs to understand its critical activities, plan for disruption, test those plans and keep delivering at an acceptable level when something goes wrong.

Business continuity planning is the work of writing down how an organisation will keep its critical activities running, or restore them quickly, when people, premises, technology or suppliers become unavailable.

Business email compromise is a scam in which criminals use forged or hijacked business email accounts, often posing as an executive or supplier, to persuade staff to send payments or change bank details.

Business ethics is the set of moral principles guiding how an organisation and its people make decisions and treat customers, staff, suppliers, competitors and society, including where the law is silent.

A business impact analysis identifies an organisation's critical activities and measures how quickly a disruption would cause serious harm, so that recovery priorities and time targets can be set on evidence.

The BRSR is the standard sustainability disclosure format that India’s securities regulator requires of its largest listed companies, covering environmental, social and governance performance in set sections with numeric indicators.

A business-wide risk assessment is a firm's own written analysis of how it could be misused for money laundering or terrorist financing, based on its customers, products, delivery channels and locations.

Bust-out fraud is a credit scam in which a borrower builds up a clean record and rising limits, then borrows or spends to the maximum across lenders and disappears without repaying.