Guide to Analysing Companies

Credit risk
The risk that a bond, loan or some other form of credit will
not be repaid when it becomes due.
Credit union
An organisation in which a group of people with a common
bond (such as employees of the same company or members of
a trade union) get together to pool their savings. Since credit
unions do not try to make a profit, most can offer higher
deposit rates and lower borrowing rates to their members than
commercial banks. Surprisingly, credit unions are popular in
the United States, where they are regulated by the National
Credit Union Administration. They are also a popular way of re-
distributing money in developing countries where borrowers
have little security and banks are reluctant to lend.
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CREST
The london stock exchange’s share settlement system,
now owned by euroclear, a former rival based in Brussels.
CRM
Short for customer relationship management: the management
of an institution’s relationship with its customers. crm involves
measuring the profitability of different customer segments and
offering appropriate services to each one. Typically, customers
go through a cycle of borrowing (when they are young), saving
(when at the peak of their earning power) and dissaving (when
they are in old age). The trick for a financial institution, as with
any business offering a service, is to maximise the value of the
relationship at each stage.
Cross default
A condition that may be attached to a debt or a security. If
the borrower or issuer defaults on any of its other debts or
securities, this automatically counts as a default in respect of the
debt or security that contains the cross-default clause. The
lender then has the right to pursue repayments as if the bor-
rower or issuer were in default on its debt or security.