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54-482: During a revolt of treasurer Qutlu Arslan , Abulasan joined a group of unranked class and wealthy citizens in a struggle to limit the royal authority in 1191, which concluded with the arrest of Qutlu Arslan; his supporters were inveigled into submission. In case to avoid next waves of rebellion, Queen Tamar elevated Abulasan to the office of amirtamira of Tbilisi , thus making him assistant of mechurchletukhutsesi (treasurer). some other historians believe that he

108-479: A British heritage, such as the Law Society of Upper Canada . Many volunteer organizations, particularly not-for-profit organizations such as charities and theaters , appoint treasurers who are responsible for conservation of the treasury, whether this be through pricing of a product, organizing sponsorship , or arranging fundraising events. The treasurer would also be part of the group which would oversee how

162-422: A bank syndicates a loan. Loans can be turned into securities through the securitization process. In a securitization, a company sells a pool of assets to a securitization trust, and the securitization trust finances its purchase of the assets by selling securities to the market. For example, a trust may own a pool of home mortgages , and be financed by residential mortgage-backed securities . In this case,

216-454: A beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and traveler's cheque . Typically,

270-479: A company, since its cost of refinancing depends on its creditworthiness . Bonds below Baa/BBB (Moody's/S&P) are considered junk or high-risk bonds. Their high risk of default (approximately 1.6 percent for Ba) is compensated by higher interest payments. Bad Debt is a loan that can not (partially or fully) be repaid by the debtor. The debtor is said to default on their debt. These types of debt are frequently repackaged and sold below face value. Buying junk bonds

324-412: A fixed lifetime, usually a number of years ; with long-term bonds, lasting over 30 years, being less common. At the end of the bond's life the money should be repaid in full. Interest may be added to the end payment, or can be paid in regular installments (known as coupons ) during the life of the bond. A letter of credit or LC can also be the source of payment for a transaction, meaning that redeeming

378-524: A more direct sense, more bankruptcies also occurred due both to increased debt cost caused by deflation and the reduced demand. At the household level, debts can also have detrimental effects — particularly when households make spending decisions assuming income will increase, or remain stable, in years to come. When households take on credit based on this assumption, life events can easily change indebtedness into over-indebtedness. Such life events include unexpected unemployment, relationship break-up, leaving

432-447: A part of its overall corporate finance strategy. A term loan is the simplest form of corporate debt. It consists of an agreement to lend a fixed amount of money, called the principal sum or principal, for a fixed period of time, with this amount to be repaid by a certain date. In commercial loans interest , calculated as a percentage of the principal sum per year, will also have to be paid by that date, or may be paid periodically in

486-422: A reasonable level of detail that provides a clear audit trail for all transactions. Debt Debt is an obligation that requires one party, the debtor , to pay money borrowed or otherwise withheld from another party, the creditor . Debt may be owed by a sovereign state or country, local government , company , or an individual. Commercial debt is generally subject to contractual terms regarding

540-420: A reference point for all other debt. There are deep, transparent, liquid, and open capital markets for Treasuries. Furthermore, Treasuries are issued in a wide variety of maturities, from one day to thirty years, which facilitates comparing the interest rates on other debt to a security of comparable maturity. In finance, the theoretical " risk-free interest rate " is often approximated by practitioners by using

594-468: A repayment amount of 1.5 to 2.5 times the principle loan. Repayment periods are flexible; businesses can pay back the agreed-upon amount sooner, if possible, or later. In addition, business owners do not sell equity or relinquish control when using revenue-based financing. Lenders that provide revenue-based financing work more closely with businesses than bank lenders, but take a more hands-off approach than private equity investors . A syndicated loan

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648-609: A second person is sometimes said to owe a "debt of gratitude" to the second person. The English term "debt" was first used in the late 13th century and comes by way of Old French from the Latin verb debere , "to owe; to have from someone else." The related term "debtor" was first used in English also in the early 13th century. Principal is the amount of money originally invested or loaned, on which basis interest and returns are calculated. There are three main ways repayment may be structured:

702-399: Is a stub . You can help Misplaced Pages by expanding it . Treasurer A treasurer is a person responsible for the financial operations of a government, business, or other organization. The treasury of a country is the department responsible for the country's economy , finance and revenue . The treasurer is generally the head of the treasury, although, in some countries (such as

756-526: Is a loan that is granted to companies that wish to borrow more money than any single lender is prepared to risk in a single loan. A syndicated loan is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as arrangers. Loan syndication is a risk management tool that allows the lead banks underwriting the debt to reduce their risk and free up lending capacity. A company may also issue bonds , which are debt securities . Bonds have

810-399: Is a means of using anticipated income and future purchasing power in the present before it has actually been earned. Commonly, people in industrialized nations use consumer debt to purchase houses, cars and other things too expensive to buy with cash on hand. People are likely to spend more and get into debt when they use credit cards as against cash to buy products and services. This

864-533: Is a process whereby a new, large loan application is submitted in order to compensate for numerous outstanding loans. Some amongst those who are heavily indebted often resort to debt consolidation as a means to resolve their financial difficulties. Upon obtaining the borrowed loan, those within the receiving end are then generally enabled to have a greater cash flow, resulting from lowering monthly payments, if not reducing interest rates . However, this varies from every claimant, in that their own eligibility for such

918-590: Is because biblically debt is seen as the responsibility of both the creditor and the debtor. Traditional Christian teaching holds that a lifestyle of debt should not be normative; the Emmanuel Association , a Methodist denomination in the conservative holiness movement , for example, teaches: "We are to refrain from entering into debt when we have no reasonable plan to pay. We are to be careful to meet all financial engagements promptly when due, if at all possible, remembering that we are to 'Provide things honest in

972-482: Is considered paramount in determining the riskiness of an investment, under the notion that it becomes more risking under more debt. Governments issue debt to pay for ongoing expenses as well as major capital projects. Government debt may be issued by sovereign states as well as by local governments, sometimes known as municipalities. Debt issued by the government of the United States, called Treasuries , serves as

1026-423: Is considered secured if creditors have recourse to specific collateral . Collateral may include claims on tax receipts (in the case of a government), specific assets (in the case of a company) or a home (in the case of a consumer). Unsecured debt comprises financial obligations for which creditors do not have recourse to the assets of the borrower to satisfy their claims. Credit bureaus collect information about

1080-412: Is entirely dependent on their own overall circumstances; Should they meet specific requirements, being able to afford such, their requests are usually accepted; Should they fail the criteria, they're almost always swiftly rejected, regardless of their financial ability. Given the often monetary hardship of contenders, those providing these loans often charge at larger rates of interest than others; This

1134-447: Is not repaid faster than it grows through interest. This effect may be termed usury , while the term "usury" in other contexts refers only to an excessive rate of interest, in excess of a reasonable profit for the risk accepted. In international legal thought, odious debt is debt that is incurred by a regime for purposes that do not serve the interest of the state. Such debts are thus considered by this doctrine to be personal debts of

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1188-414: Is occasionally a matter of debate in the financial and institutional sectors, often ranging between analysts towards professors, generally concerning ethics involved in different areas. Companies also use debt in many ways for capital expenditures and other business investments produced in their assets , "leveraging" the return on their equity . This leverage , the proportion of debt to equity,

1242-659: Is often critiqued by its opponents, who claim that it is an unfair practice aimed at targeting those who are desperate and often holds arbitrary figures, although those in its defence claim it is a security measure aimed at ensuring its repayment obligations and must take precautions before offering large sums. Both arguments have resulted in greater debate amongst legislators in different nations, amidst demands for further regulation and more decreases in lending restrictions. Debt consolidation has also been an area of interest for loan sharks , leaving those heavily indebted vulnerable to extortionate rates. The idea behind debt consolidation

1296-403: Is primarily because of the transparency effect and consumer's "pain of paying." The transparency effect refers to the idea that the further you are from cash (as with a credit card or other forms of payment), the less transparent it is and the less aware you are of how much you have spent. The less transparent or further away from cash the form of payment employed is, the less an individual feels

1350-518: Is seen as a risky but potentially profitable investment. Bonds are debt securities , tradeable on a bond market . A country's regulatory structure determines what qualifies as a security. For example, in North America, each security is uniquely identified by a CUSIP for trading and settlement purposes. In contrast, loans are not securities and do not have CUSIPs (or the equivalent). Loans may be sold or acquired in certain circumstances, as when

1404-564: Is that many people, in particular those who are poor, have no access to affordable credit. Such debts can cause problems when they are not paid back according to expectations of the lending household. In 2011, 8 percent of people in the European Union reported their households has been in arrears, that is, unable to pay as scheduled "payments related to informal loans from friends or relatives not living in your household". A company may use various kinds of debt to finance its operations as

1458-458: Is the ratio of income available to the amount of debt service due (including both interest and principal amortization, if any). The higher the debt service coverage ratio, the more income is available to pay debt service, and the easier and lower-cost it will be for a borrower to obtain financing. Different debt markets have somewhat different conventions in terminology and calculations for income-related metrics. For example, in mortgage lending in

1512-419: Is the ratio of the total amount of the loan to the total value of the collateral securing the loan. For example, in mortgage lending in the United States, the loan-to-value concept is most commonly expressed as a " down payment ." A 20% down payment is equivalent to an 80% loan to value. With home purchases, value may be assessed using the agreed-upon purchase price, and/or an appraisal . A debt obligation

1566-575: The debt-to-GDP ratio was very high. Economic agents were heavily indebted. This excess of debt, equivalent to excessive expectations on future returns, accompanied asset bubbles on the stock markets. When expectations corrected, deflation and a credit crunch followed. Deflation effectively made debt more expensive and, as Fisher explained, this reinforced deflation again, because, in order to reduce their debt level, economic agents reduced their consumption and investment. The reduction in demand reduced business activity and caused further unemployment. In

1620-453: The "pain of paying" and thus is likely to spend more. Furthermore, the differing physical appearance/form that credit cards have from cash may cause them to be viewed as "monopoly" money vs. real money, luring individuals to spend more money than they would if they only had cash available. Besides these more formal debts, private individuals also lend informally to other people, mostly relatives or friends. One reason for such informal debts

1674-570: The Abulasan won, the choice was approved by Tamar's aunt Rusudan and council of feudal lords. Their choice fell on Yuri , son of the murdered prince Andrey Bogolyubsky of Vladimir-Suzdal , who then lived as a refugee among the Kipchaks of the North Caucasus . Abulasan called an influential person in the kingdom, the great merchant Zankan Zorababeli . and ordered him to bring the bridegroom to Tbilisi,

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1728-524: The Treasurer is the head of the corporate treasury department. They are typically responsible for: liquidity risk management; cash management ; issuing debt , and capital structure more generally (including share issuance and repurchase ); managing intercompany transactions denominated in foreign currencies, interest rate risk hedging , and currency analytics ; securitizations ; oversight of pension investment management . They also typically advise

1782-773: The United Kingdom or the United States) the treasury reports to a Secretary of the Treasury or Chancellor of the Exchequer . In Australia , the Treasurer is a senior minister and usually the second or third most important member of the government after the Prime Minister and Deputy Prime Minister . Each Australian state and self-governing territory also has its own treasurer . From 1867 to 1993, Ontario's Minister of Finance

1836-398: The United States, a debt-to-income ratio typically includes the cost of mortgage payments as well as insurance and property tax, divided by a consumer's monthly income. A "front-end ratio" of 28% or below, together with a "back-end ratio" (including required payments on non-housing debt as well) of 36% or below is also required to be eligible for a conforming loan. The loan-to-value ratio

1890-434: The ability of the debtor to honor his obligations and accordingly give him or her a credit rating . Moody's uses the letters Aaa Aa A Baa Ba B Caa Ca C , where ratings Aa-Caa are qualified by numbers 1-3. S&P and other rating agencies have slightly different systems using capital letters and +/- qualifiers. Thus a government or corporation with a high rating would have Aaa rating. A change in ratings can strongly affect

1944-471: The amount and timing of repayments of principal and interest . Loans , bonds , notes, and mortgages are all types of debt. In financial accounting , debt is a type of financial transaction , as distinct from equity . The term can also be used metaphorically to cover moral obligations and other interactions not based on a monetary value. For example, in Western cultures, a person who has been helped by

1998-412: The asset-backed trust is a debt issuer of residential mortgage-backed securities . Central banks , such as the U.S. Federal Reserve System , play a key role in the debt markets. Debt is normally denominated in a particular currency , and so changes in the valuation of that currency can change the effective size of the debt. This can happen due to inflation or deflation , so it can happen even though

2052-509: The borrower and the lender are using the same currency . Some argue against debt as an instrument and institution, on a personal, family, social, corporate and governmental level. Some Islamic banking forbids lending with interest even today. In hard times, the cost of servicing debt can grow beyond the debtor's ability to pay, due to either external events (income loss) or internal difficulties (poor management of resources). Debt with an associated interest rate will increase through time if it

2106-548: The borrowing and repayment history of consumers. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers. In the United States, the primary credit bureaus are Equifax , Experian , and TransUnion . Debts owed by governments and private corporations may be rated by rating agencies , such as Moody's , Standard & Poor's , Fitch Ratings , and A. M. Best . The government or company itself will also be given its own separate rating. These agencies assess

2160-413: The conditions are defined unilaterally by the issuing municipality (local government), but it is a slower process to accumulate the necessary amount. Usually, debt or bond financing will not be used to finance current operating expenditures, the purposes of these amounts are local developments, capital investments, constructions, own contribution to other credits or grants. The debt service coverage ratio

2214-513: The corporation on matters relating to corporate finance . They could also have oversight of other areas, such as the purchase of insurance . In the Inns of Court , the professional associations for barristers in England and Wales , the bencher or master of the bench who heads the inn for that year holds the title 'master treasurer'. This title is similarly used by other legal associations sharing

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2268-528: The current yield of a Treasury of the same duration. The overall level of indebtedness by a government is typically shown as a ratio of debt-to-GDP . This ratio helps to assess the speed of changes in government indebtedness and the size of the debt due. The United Nations Sustainable Development Goal 17 , an integral part of the 2030 Agenda has a target to address the external debt of highly indebted poor countries to reduce debt distress. Municipal bonds (or muni bonds) are typical debt obligations, for which

2322-459: The documents a beneficiary has to present in order to receive payment include a commercial invoice , bill of lading , and a document proving the shipment was insured against loss or damage in transit. However, the list and form of documents is open to imagination and negotiation and might contain requirements to present documents issued by a neutral third party evidencing the quality of the goods shipped, or their place of origin. Debt consolidation

2376-446: The entire principal balance may be due at the maturity of the loan; the entire principal balance may be amortized over the term of the loan; or the loan may be partially amortized during its term, with the remaining principal due as a " balloon payment " at maturity. Amortization structures are common in mortgages and credit cards . Debtors of every type default on their debt from time to time, with various consequences depending on

2430-402: The interval, such as annually or monthly. Such loans are also colloquially called " bullet loans ", particularly if there is only a single payment at the end – the "bullet" – without a "stream" of interest payments during the life of the loan. A revenue-based financing loan comes with a fixed repayment target that is reached over a period of several years. This type of loan generally comes with

2484-542: The latter fulfilled his mission with zeal, the prince was brought to Georgia to marry the queen in 1185. Favoured by Yuri, Abulasan obtained promotion and became the "mechurchletukhutsesi" (1187–1188) of the state, he was also appointed as Eristavi of Kartli (which was deprived of from Rati Surameli ) . After the banishment of Yuri from the Georgian court, Abulasan was deprived all the office and his possessions were confiscated. This Georgian history -related article

2538-744: The lending of "food money" was commonplace in Middle Eastern civilizations as early as 5000 BC. Religions like Judaism and Christianity for example, demand that debt be forgiven on a regular basis, in order to prevent systemic inequities between groups in society, or anyone becoming a specialist in holding debt and coercing repayment. An example is the Biblical Jubilee year , described in the Book of Leviticus . Similarly, in Deuteronomy chapter 15 and verse 1 states that debts be forgiven after seven years. This

2592-409: The letter of credit will pay an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, stormwater ponds, etc.) will be built. The parties to a letter of credit are usually

2646-459: The money is spent, either directly dictating expenditure or authorizing it as required. It is their responsibility to ensure that the organization has enough money to carry out their stated aims and objectives, and that they do not overspend, or under spend. They also report to the board meetings or the general membership the financial status of the organization to ensure checks and balances. Accurate records and supporting documentation must be kept to

2700-685: The parental home, business failure , illness, or home repairs. Over-indebtedness has severe social consequences, such as financial hardship, poor physical and mental health, family stress, stigma, difficulty obtaining employment, exclusion from basic financial services ( European Commission , 2009), work accidents and industrial disease, a strain on social relations (Carpentier and Van den Bosch, 2008), absenteeism at work and lack of organisational commitment (Kim et al. , 2003), feeling of insecurity, and relational tensions. Global debt underwriting grew 4.3 percent year-over-year to US$ 5.19   trillion during 2004. According to historian Paul Johnson ,

2754-465: The regime that incurred them and not debts of the state. International Third World debt has reached the scale that many economists are convinced that debt relief or debt cancellation is the only way to restore global equity in relations with the developing nations . Excessive debt accumulation has been blamed for exacerbating economic problems . For example, before the Great Depression ,

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2808-449: The terms of the debt and the law governing default in the relevant jurisdiction. If the debt was secured by specific collateral , such as a car or house, the creditor may seek to repossess the collateral. In more serious circumstances, individuals and companies may go into bankruptcy . Common types of debt owed by individuals and households include mortgage loans , car loans, credit card debt, and income taxes . For individuals, debt

2862-452: Was also invited in the "Darbazi" ( Royal Council ) as a representative of the merchant-class. The queen Tamar's marriage was a question of state-importance. Every group strove to select and secure the acceptance of its candidate in order to strengthen its position and influence at court. Two main factions fought for the influence in Tamar's court: clan of Mkhargrdzeli and Abulasan. The faction of

2916-543: Was called the Treasurer of Ontario. Originally the word referred to the person in charge of the treasure of a noble ; however, it has now moved into wider use. In England during the 17th century, a position of Lord High Treasurer was used on several occasions as the third great officer of the Crown . Now the title First Lord of the Treasury is the official title of the British Prime Minister . In corporations,

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