Category Archives: Financial Terms

Economy for the Common Good in a nutshell

A very feasible model, indeed

Economy for the Common Good is far more practical and feasible than its somewhat utopian name may suggest. It is not about building castles in the air, it is a really well thought out and down-to-Earth model. Short and plain:
Do you want to produce goods and services flouting labour rights or polluting our planet? No problem: go ahead.
Do you want to sell your products or services in our market, too? All right, just do it.
Just one thing: we will tax your products 20 times higher than any other respectful products, so yours will be way more expensive on the market. Besides by means of a code (similar to a colour barcode), consumers will be able to see at a glance to what extent each product respects a series of ethical and environmental principles.
Isn’t your company transparent? Well, you can’t sell your products or services on our market. Sorry, mate!
Thus, if you want to make a profit, you will necessarily increase the common good in the process.
Result: if these are the new rules of the game, any entrepreneur, no matter how unscrupulous they are, will be willing to comply with the new legal framework so that their products and services are competitive on the market. It is a system that rewards the good businessperson and punishes predators, with the aim of benefiting the whole community. You can get rich, of course, but the only way to achieve it is by making a positive contribution. Economy for the Common Good calls for reevaluating economic relations by, for example, putting limits on financial speculation and encouraging companies to produce socially-responsible products.
So Economy of the Common Good is about changing the rules of the game, not the entire system. It is feasible because it only depends on political will.

So, at the end of the day, It is a model that juggles the legitimate aspiration to prosper and environmental awareness around to fit all human needs in. Furthermore, both liberals and left-wingers could agree upon such principles. How good can you have it?

Yanis Varoufakis on Universal Basic Income

Guaranteed Minimum Income, Universal Basic Income and Universal Basic Dividend

In the midst of the worst global pandemic since the 1918 flu — inappropriately named Spanish flu, since it didn’t originate in Spain—  some countries such as the USA are implementing economic emergency measures or, if you like, actions, to prevent millions of citizens from going bankrupt. In a sense, it could be argued that it is similar to a Guaranteed Minimum Income.

Meanwhile, the European Union, to put it mildly, doesn’t cut the mustard and is disappointing everybody once again: uncoordinated, lacking in solidarity, aimless, drifting… In one word: lame.

It is in this context that we should listen to the ones that got it right during the last financial crisis; people like Yanis Varoufakis, an eminent Greek economist, academic, philosopher and politician.

But before going into further details, we should know what we are talking about. First of all, we must distinguish between the Guaranteed Minimum Income (GMI) and the Universal Basic Income (UBI). Afterwards we can tackle the Universal Basic Dividend brought forward by Professor Varoufakis.

Guaranteed Minimum Income (GMI), also called minimum income, is a system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by the following: citizenship, a means test, and either availability for the labor market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to reduce poverty. If citizenship is the only requirement, the system turns into a universal basic income.

On the other hand, Universal Basic Income (UBI) is a model for providing all citizens with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.

That said, let’s pay close attention to what Professor Varoufakis has to say:

So, according to the renowned economist, the Universal Basic Income shouldn’t come from taxation, since it might become a source of conflicts within the working class. He points out that nowadays capital is socially produced, so he brings forward the idea of a Universal Basic Dividend where a percentage of shares of all companies should go to a public equity trust that works as a wealth fund for society. The dividends should be distributed to every member of society equally, so the income comes from return of capital, not from taxation.

Contrary to what many may think, Varoufakis is for a global governance. He is not against free trade, but he stresses that it should be accompanied by binding rules in order to avoid social dumping.

One thing is for sure: something must be done, asap. Countries can’t just let their people and SMEs go bankrupt overnight. We might be about to face the worst economic crisis since the Great Depression, and this pandemic and its consequent lockdown could take a while. Util we don’t have a vaccine, what can’t be cured, must be endured, and unprecedented economic measures must be put into effect. A more egalitarian society fits everyone, since it means a more stable, safe, human and prosperous society. For once, let’s be smart. We are in this crisis together and we will come out of it together. There is no other way.

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Mergers and Acquisitions

M & A Mergers and Acquisitions

M&A represent an important part of corporate finance. Every day big investment banks arrange M&A transactions, and it means a lot of documents that must often be translated by specialized translators.

Mergers and acquisitions are both aspects of strategic management, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow quickly,  In fact, mergers and takeovers (or acquisitions) are very similar corporate actions – they combine two previously separate firms into a single legal entity.

A merger takes place when two companies join together to form a new one (e.g. Walt Disney and Pixar or Exxon and Mobil, Facebook and WhatsApp…)

A takeover or acquisition takes place when a company buys another one (e.g. Daimler Benz and Crysler, Microsoft and Nokia…)

Proz webinar Financial Translation

So a takeover is the purchase of a company. A takeover is different from a merger, which occurs when the purchaser and the target both cease to exist and instead form a new, combined company.

M&A can be also defined as a type of restructuring in that they result in some entity reorganization with the aim to provide growth or positive value. Consolidation of an industry or sector occurs when widespread M&A activity concentrates the resources of many small companies into a few larger ones, such as occurred with the automotive industry between 1910 and 1940.

Mergesrs and Acquisitions in Spanish: Fusiones y Adquisiciones

Mergers and Acquisitions in French: Fusions-acquisitions

 

Rating agencies

What is a rating agency?

The companies, countries or regions issuing bonds, known as the issuers (borrowers), are given a credit rating by credit agencies, such as Standard and Poor’s, Moody’s and Fitch. So they are somehow graded, or rated according to its solvency or the risk that the borrower will default.

Rating agency in Spanish: Agencia de calificación

Rating agency in French: Agence de notation

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By financial translator

Asset Management

Asset Management

Asset management, a term commonly used in the financial world, involves any system that monitors and keeps things of value in an entity or group, whether they are tangible assets (such as machinery, gold, buildings or land), intangible assets (such as patents, trademarks, human capital, intellectual property or goodwill) or financial assets (such as stocks or bonds, which can be traded on financial markets).

Asset Management refers to the balancing of costs, opportunities and risks against the desired performance of assets, to achieve the organizational objectives. It usualy describes people (for example fund managers) and companies (for instance, firms that manage the assets of a pension fund) that manage investments on behalf of others.

financial translation webinar asset management proz

Asset Management in Spanish: Gestión de Activos

Asset Management in French: Gestion d’Actifs

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By Financial Translator

How the Stock Exchange works

Stock exchange explained

A stock exchange is an exchange or stock market where stock brokers and traders can buy and/or sell stocks (also called shares), bonds, and other securities. Stock exchanges may also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by listed companies (or quoted companies), unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as “continuous auction” markets, with buyers and sellers consummating transactions at a central location, such as the floor of the exchange.

 

Traducción financiera

High frequency trading Trading de alta frecuencia

Daily tip: High frequency trading Trading de alta frecuencia

High-frequency trading (HFT) is a primary form of algorithmic trading in finance. Specifically, it is the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second. It is estimated that as of 2009, HFT accounted for 60-73% of all US equity trading volume, with that number falling to approximately 50% in 2012.

El Trading de Alta Frecuencia es la negociación en los mercados financieros con herramientas tecnológicas avanzadas, servidores que generan millones de órdenes de compra-venta en milésimas de segundo utilizando algoritmos informáticos. Cada posición de inversión se mantiene durante fracciones de segundo, generando miles o decenas de miles de operaciones al día con un valor de millones de euros.

Links:

High frequency trading explained simply (Forbes)

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Traducción financiera

Exchange rate

Daily tip: Exchange rate (Tasa de cambio)

In finance, an exchange rate (also known as a foreign-exchange rateforex rateFX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.

En finanzas, el tipo de cambio (también conocido como tasa de cambio, tasa FX o Agio) entre dos monedas es la tasa a la que se intercambia una moneda por otra. También es considerado como el valor de la moneda de un país en términos de otra moneda.

Exchange rate (EN)

Tasa de cambio (SP)

Taux de Change (FR)

inglés financiero

By Financial Translator / Traductor financiero

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