GLOSSARY

List of Financial Terms in alphabetical order:

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OCC See Office of the Comptroller of the Currency

Ocean Marine Insurance Insurance for all ocean-going and inland vessels, including business or leisure craft and the associated facilities such as piers, terminals and repair facilities.

Off Balance Sheet Instrument Any derivative (swap, forward, or option) that does not represent an obligation to pay at the time of the balance sheet date. Off-balance sheet instruments impact the institution's risk structure without appearing on the balance sheet. Information regarding derivatives and other obligations is disclosed in the footnotes of the annual report in many countries. And in some countries, banks are required to show their mark-to- market "in the money" positions as an asset and their "out of the money" positions as a liability

Off-Balance Sheet Items Broad term incorporating both contingent liabilities (guarantees, committed lines of credit, letters of credit) and off-balance sheet instruments (derivatives) that do not represent an obligation to pay at the time of the balance sheet date. The institution's risk structure is impacted by these items, which do not appear on the balance sheet. Information regarding these items is shown in the footnotes of the financial report in many countries.

Offer Price Price at which a securities dealer, market maker or any prospective seller is willing to sell the asset. Also referred to as the "asked price" or "ask."

Office of the Comptroller of the Currency (OCC) The agency that supervises the administrative and investment policies of the nationally chartered banks in the U.S. Every national bank is examined on a periodic basis by the OCC and is required to file a Statement of Condition at least four times a year.

Offshore Banking Describes the establishment and operation of a U.S. or foreign bank in offshore tax havens such as the Cayman Islands, the Bahamas and the British Virgin Islands. Also refers to "International Banking Facility (IBF)."

Open Market Operation One of the methods used by central banks, such as the Federal Reserve, to conduct monetary policy. It involves the purchase and sale of domestic government securities or other domestic assets by the central bank. This action alters bank reserves, which then affects the credit supply and monetary base. The change is then felt throughout the economy.

Open Position Net long or short foreign currency or futures, the value of which will change with a change in the foreign currency rate or futures prices.

Operational Risk Risk of direct or indirect loss from the failure of internal processes, personnel, systems, or external events. The loss could be catastrophic or occur incrementally over time. It includes fraud, theft and computer system failure.

Option An exchange-traded contract that gives the holder the right, but not the obligation, to buy (call option) or sell (put option) an asset (securities, commodities, etc.) at a stated price (strike or exercise price). European options can only be exercised on a stated date, while American options can be exercised at any time up to and including the stated date. The term also includes any non-exchange-traded contract with similar economic characteristics to an exchange-traded option.

Options See Option.

Order Flow Volume of securities trading from a customer to a dealer. Large volumes of orders enable a dealer to gauge the state of the market. As a result, the dealer can offer more competitive terms on certain securities.

Ordinary Banks Term used to describe commercial banks in Japan.

Ordinary Life Insurance A type of life insurance where premiums are paid continuously over the lifetime of the insured at predetermined intervals (e.g., annually, quarterly or monthly). Once one of the most popular forms of life insurance, it has been recently displaced by newer products such as universal and variable life insurance.

Origination Fee Fee charged by a lender to cover the application and credit investigation costs related to a loan.

OTC See Over The Counter.

Out-Of-The-Money Term used to describe a call option when its strike price (stated price at which the underlying asset may be purchased or sold) is greater than the current market price of the underlying asset. A put option is out-of-the-money if the strike price is less than the current market price of the underlying asset.

Over The Counter (OTC) Market where traders are connected through computer networks and telephones and conduct trading through these mechanisms rather than on the floor of an exchange. Rules for OTC trading are written and enforced by the National Association of Securities Dealers (NASD) in the U.S.

Overallotment Provision A clause found in a securities underwriting agreement that allows the underwriter to buy additional shares of an initial public offering to cover orders in excess of the designated amount which that particular underwriter committed to sell.

Overriding Commission A term used in traditional insurance to describe a commission earned by a field office manager based on the business produced by the agents in that office. The term is also used in reinsurance and describes an allowance paid to the ceding company to allow for overhead expenses and includes room for profit.

Oversubscribed A term used in securities underwriting to describe a new stock issue when there are more buyers than available shares to sell. The result will be that the share price will increase as soon as the shares are available on the market. In certain situations, the issuer may increase the number of shares available when an issue is oversubscribed.

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