Now that the world's banking systems are going down the toilet, bankers have developed a whole new vocabulary for repackaging failure. Here are a few euphemisms that I have heard recently, coupled with my own translations.
Legacy risk = Worthless assets accumulated by the previous CEO
Fee pools = Investment bank scams designed to fleece unwary high-wealth clients
Selective disposals = A fire sale in order to raise some quick cash to meet regulatory capital requirements
Retail book re-pricing = Writing down worthless mortgages that currently pollute the bank's balance sheet.
Asset run downs = see selective disposals
Liquidity portfolio re-based to lower risk liquidity = Receiving emergency liquidity support from the central bank
Focused investment only in areas that add most value = Dumping mortgage assets and buying US treasuries.
Dramatic changes in the strategic landscape = a recession
“fast-to-market” deals = lend now, worry about the financial regulator later
Developing a less capital-intensive business = downsizing to a smaller office, with fewer staff and fewer laptops
Run-off CDO portfolio losses = Yes, we did a few deals with Lehmans just before Paulson pulled the plug.