Guide to Analysing Companies

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Bretton Woods Agreement
The pact made in 1994 between 44 countries at Bretton Woods
in New Hampshire in the United States to create a system of
fixed exchange rates. The agreement, which became law the fol-
lowing year, remained in existence until 1971 when the system
was scrapped and currencies were allowed to float. To help the
world economy reconstruct itself after the ravages of the
second world war, the conference also hit upon the idea of es-
tablishing the international monetary fund and the In-
ternational Bank for Reconstruction and Development (usually
known as the world bank), both of which are still doing their
jobs.
Bridging loan
A loan that spans the short period from now to the time when
a more long-term credit facility can be arranged. Bridging
loans are commonly used for house purchases before a long-
term mortgage has been set up, although the increasing
speed with which banks can offer and approve mortgages has
reduced the need for such loans. Bridging loans are also used to
help developing countries in financial distress (see bank for
international settlements).
Broker
An individual or firm that buys and sells financial instru-
ments on behalf of others. A broker is an agent who works
for investors and financial institutions. Brokers earn a com-
mission based on the value of the transactions undertaken.
Commission rates used to be fixed, but in most major markets
they are now deregulated. So, to a large extent, brokers compete
for business on the basis of price as well as the quality of their
service. A broking firm that specialises in shares, bonds,
commodities or options must be recognised by the ex-
change with which it is dealing. Such recognition helps to