Guide to Analysing Companies

RUF
See revolving underwriting facility.
Run
As in a “run on a bank” or a “run on the peso”. The nightmare
of all financial institutions is the sight of depositors queuing
round the block to get their money out of a bank, or out of a par-
ticular currency. In both cases, the run is caused by fear: either
that the bank is about to go bust, or that the currency may be de-
valued (thus reducing the value of any deposits denominated
in it). In both cases, the fear may become self-fulfilling: either
the bank will go bust if all depositors want their money at the
same time, or a currency will be devalued if too many people
R
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ROUND LOT
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want to sell it. central banks or governments can sometimes
play for time (for instance, by freezing deposits in one currency
or by closing the banks), but sooner or later the pressures
become too great to withstand unless confidence in the cur-
rency or the bank is restored.
RUN
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Ss
S&L
See savings and loan association.
Samurai bond
A yen-denominated bond issued in Japan by a non-Japanese
borrower; the Japanese version of a yankee bond or a
bulldog bond. Samurai bonds are attractive to Japanese in-
vestors partly because they are free of withholding tax.
Sarbanes-Oxley Act
A tough securities law introduced in the wake of the
corporate scandals that rocked the financial markets in the
United States at the beginning of the 21st century. Among other
things, it established a Public Company Accounting Oversight
Board to supervise the auditing standards of large companies;
required ceos and chief financial officers to sign off person-
ally on their companies’ accounts; banned auditors from
selling some consulting services to the same client; gave the
audit committees of big companies the power to hire and fire
auditing firms; made it a crime not to disclose material trans-
actions that take place off companies’ balance sheets; and in-
creased the penalties for white-collar crime. Draconian in its
scope, the act was regarded by many as too much, too late. It
gave the securities and exchange commission the job
of fine-tuning the new legislation.