NATIXIS -2020 Universal Registration Document

9 LEGAL AND GENERAL INFORMATION Glossary

Acronym/Term

Definition

High Environmental Quality ( Haute qualité environnementale )

HQE

HQLA

High-quality liquid assets

HR HY

Human Resource

High Yield

IARD

Property and casualty insurance ( Incendie, Accidents et Risques Divers ).

IAS

International Accounting Standards International Accounting Standards Board

IASB IBOR

Interbank Offered Rate

ICAAP

Internal Capital Adequacy Assessment Process, a practice required under Pillar II of the Basel Accords to ensure that firms have sufficient capital to cover all their risks

IDFC IFACI

Infrastructure Development Finance Company

French Institute of Internal Auditing and Control ( Institut Français de l’Audit et du Contrôle Internes ). International Financial Reporting Interpretations Committee (IFRIC) — IFRIC 21, adopted by the European Union in June 2014, is an interpretation of IAS 37 “Provisions, Contingent Liabilities and Contingent Assets.”

IFRIC 21

IFRS

International Financial Reporting Standards

IMF

International Monetary Fund

Incremental Risk Charge (IRC)

The capital requirement intended to cover issuers’ credit migration and default risks for a period of one year for fixed income and loan instruments in the trading book (bonds and CDS). The IRC is a 99.9% value-at-risk measure; i.e. the greatest risk after the elimination of the 0.1% worst-case scenarios. Encompasses asset and liability risks (interest rate, valuation, counterparty and forex risk) as well as risks related to the pricing of mortality risk premiums and the risks associated with life and non-life insurance, including pandemics, accidents and natural disasters (such as earthquakes, hurricanes, industrial accidents, acts of terrorism and military conflict). A long-term rating of a counterparty or underlying issue awarded by a rating agency, ranging from AAA/Aaa to BBB-/Baa3. A rating of BB+/Ba1 or below is considered non-investment grade. Internal-ratings based, refers to the Internal Ratings-Based Approach, the measurement of credit risk on the basis of credit ratings as defined by EU regulations.

Insurance risk

Investment grade

IRB

IRM

Incremental Risk Measure

IRRBB

Interest rate risk in the banking book. IRRBB designates the current or future risk to which the bank’s capital and profits are exposed due to adverse interest rate fluctuations influencing positions in the banking book.

IS

Information system

ISDA

International Swaps and Derivatives Association

ISF ISP

Wealth Tax ( Impôt Sur la Fortune )

Investment service provider

IWMA

Independent wealth management advisor

JV

Joint Venture

L&R LBO LCR

Loans and receivables

Leveraged buyout

Liquidity coverage ratio

Leverage effect

The leverage effect accounts for the rate of return on equity based on the after-tax rate of return on invested capital (return on capital employed) and the cost of debt. By definition, it is equal to the difference between the rate of return on equity and the return on capital employed.

Leverage/leveraged financing

Financing through debt

LGD

Loss Given Default, a Basel 2 credit risk indicator corresponding to the loss in the event of default. It is expressed as a percentage (loss rate).

Libor

London Interbank Offered Rate

Liquidity

In a banking context, liquidity refers to a bank’s ability to cover its short-term commitments. Liquidity also refers to the degree to which an asset can be quickly bought or sold on a market without a substantial reduction in value.

612

NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020