London Inter-Bank Offer Rate (“LIBOR”) fixing

LIBOR is set through a process involving various banks submitting daily the interest rates at which they are willing to lend, to the respective trade organization in their regions. This results in interbank offered rates which are a benchmark for pricing of financial products worth hundreds of trillion Dollars and which include floating rate mortgages, interest rate swaps, student and corporate loans etc.

LIBOR fixing involved a series of fraudulent actions by banks. It was noted that various major banks globally inflating and deflating their rates to create a false impression on their creditworthiness which was in reality much worse than shown. Bob Diamond, CEO Barclays had admitted to manipulation of these rates at Barclays incurring it a 450 Million Dollar Fine. Various banks including Citigroup, JP Morgan HSBC, UBS were investigated.

Barclays and certain other banks submitted artificially low rates to pretense strength and to boost traders’ profits. Earliest suggestions of the underlying condition was by the Wall Street Journal as early as in 2008 April.[1]


Non-Banking Financial Companies (“NBFC”)

According to the Reserve Bank of India (“RBI”) a NBFC is a company engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.[1] A non-banking institution which is a company and has the principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner is also a non-banking financial company (Residuary non-banking company).[2] When a registered company’s financial assets constitute more than 50% of the total assets and its income from financial assets constitutes more than 50%, it can be registered with RBI as an NBFC. Though NBFCs lend and make investments, similar to banks, the similarity ends here. NBFCs cannot accept demand deposits nor do they form a part of the payment and settlement system and hence they cannot issue cheques drawn on itself. Further, Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in the case of banks. Though RBI has supervisory and regulatory oversight on NBFCs, an Insurance company holding a valid IRDAI issued Registration Certificate are regulated by IRDAI.

The idea of NBFCs was first categorized under the American Dodd-Frank Wall Street Reform and Consumer Protection Act as companies that are predominantly engaged in financial activities and encompassed companies offering services similar to banks such as, credit unions, insurance companies, asset managers, hedge funds, Private Equity firms etc. It has been claimed that easy lending environment created by NBFCs was of the causes of the subprime mortgage meltdown. Lehman Brothers and Bear Stearns were most notorious NBFCs at the center of the meltdown. Traditional banks saw themselves under tightened regulations post the 2008 crisis leading to a slowdown in lending. As a result, NBFCs being able to operate outside constraints of banking regulations saw a rise in number.

The Reserve Bank in India classified enterprises handling Peer-to-Peer (“P2P”) Lending as NBFCs and this segment is growing tremendously all over the world.

At present there are 18 categories of NBFCs registered with the RBI:

  1. On basis of liability, Deposit Taking NBFCs, and Non-Deposit Taking NBFC.
  2. On basis of size, Non-Deposit Taking NBFC can be systematically important (“NBFC-SI”) and non-deposit holding companies (“NBFC-ND”).
  3. On basis of activities, NBFCs are categorized as follows:
  • Asset Finance Company (AFC)
  • Investment Company (IC)
  • Loan Company (LC)
  • Infrastructure Finance Company (IFC)
  • Systematically Important Core Investment Company (CIC-ND-SI)
  • Infrastructure Debt Fund NBFC (IDF-NBFC)
  • Mortgage Guarantee Companies (MGC)
  • NBFC Non-Operative Financial Holding Company (NOFHC)
  • Peer-to-Peer Lending Platforms (P2P)
  • Non-Banking Financial Company-Micro Financial Institutions (NBFC-MFI)

Further, Chit Fund Companies are NBFCs regulated by the State Government, Venture Capital Fund, Stock Brokering, and Merchant Banking are regulated by the SEBI, Housing Finance by the National Housing Board and Nidhi Companies are regulated by the Ministry of Corporate Affairs.


[2] Ibid.

Wall Street Wildlife

“Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.” – john maynard keynes

Bull & Bear


Bull and bear are the most commonly used in the context of market trends. Bull charges ahead ignoring anyone in his path, this mentality in the stock market drives stock prices high and bullies others into higher investments. Thus the term bull market is an optimistic one, which reflects an improving economy with an underlying belief that stocks will climb higher. A bull charges ahead, thrusting horns upwards, looking upwards. Bullish trend thus implies where stock prices are increasing and money is flowing into stocks. A Bullish market sees high investor confidence. It is typically an improved market performance over a period of months or years and can be in the context of the market as a whole or just a particular stock. Bull market signals to strengthen the economy.

A Bear, on the other hand, tears things down with his claws. Similarly, a bear market reflects shredding hopes and confidence with bullish investors selling or short selling everything, thus bringing down prices across the board. This trend reflects pessimism toward market performance. Bears, swipe down their prey, tearing it as in this case, and market confidence to shreds filled with pessimism and negative sentiment. Typically the threshold for a bear market is a more than 20% downturn by major indices like S&P 500 or Dow Jones Industrial average over two months.

Typically investors and markets shift between these two modes, depending on various factors including global economic concerns and financial performance.



Wolf is a ferocious animal. Wolf in Wall Street lingo refers to someone hungry to reach the top and ruthlessly making money, be it criminally, unethically or fraudulently




Dog refers to an underperforming stock, purchasing which does not make sense. However, there is a Dogs of Dow theory that says that if you buy a dog with the highest dividend yield in Dow 30, it might result in a turnaround of about 15% in fifteen years.




A dead cat bounce refers to temporary recovery in the stock price of a falling stock which gives hope that it might come back up. However, with dead cat bounce, the stock might plunge again, lower than it was earlier.

Hawk & Dove

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A Hawk as a bird is powerful and aggressive. In Wall Street context, a Hawk refers to a policymaker or regulator who is predominantly concerned with economic growth than with recessionary pressure brought to bear with the same. In an economic sense, a hawk believes that interest rates are better high in order to keep inflation in check, they favour tightening of monetary policy. They watch interest rates and inflation with a close eye.

Contrastingly, a dove as a bird is gentle and tame. A Dove on Wall Street holds the belief that low-interest rates stimulate the economy, even if it leads to inflation. These are economic policy gurus advocating for lower interest rates and belief that inflation would have a minimal negative impact on society. They are more tolerant of price inflation.

Lame Duck

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This phrase can be traced back to 18th Century London Stock Exchange to refer to traders who defaulted their debt. Refers to an out of use term referring to a trader having defaulted on a debt or gone bankrupt due to inability to cover trading losses. Refers to traders who had injured themselves financially in the market waddled away from the exchange. The term is a descriptor of an underfinanced business scheme. Ineffective politician etc. A Lame duck in Wall Street refers to a trader who ends up with huge losses, defaulted debts or bankruptcy.


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A black swan is a rare unpredictable event with serious implications on the economy. It refers to the assumption that all swans are white. Nassim Nicholas Taleb[1] popularized this term, which is random. World War I, the Dot Com Bubble, 9/11 attacks and Prolonged conflicts marked with uncertainty. are examples of black swan events. These have severe repercussions as these events deviate beyond what is normally expected and extremely difficult to predict. When Black Swan strikes, all risk management models based on historical data render useless.




Like childhood usage, Chicken on Wall Street refers to investors who are scared by nature and would rather sit on current portfolios, than making changes despite a good chance of turning nice profits.






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Pigs refer to rich and high-risk investors who wish to make as much money in the shortest time possible. They invest based on tips and emotions rather than on studied background of the company. It also reflects the greed and impatience and these investors often lose big in the market. Just like the pig in farmland that overindulges in feed, this kind investor will hold onto an investment even after a substantial movement, in hope that the investment will provide even greater gains.



When in danger, Ostriches, as an animal chose to bury their heads in the sand and wait for the danger to pass. Thus the term Ostriche in Wall Street describes investors who ignore negative and threatening information and do nothing but a hope that their portfolios are not hit too hard. They fail to react to critical situations or events that have the likelihood to impact his/ her investments. These traders tend to appear (or disappear) more frequently during the bear markets where people experience most financial stress.


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A sheep as an animal is not a leader but a follower and can be eaten by a bull or a bear, it needs a shepherd for guidance. Similarly, Sheep is a term used to describe such investors that are not leaders but followers and rely on advice from family, friends and financial market pundits, market trends. They often suffer because of foul advice or late action. These type of investors do not have any strategy or focus and miss out on meaningful moves in the market. Their lack of research leads to lack of confidence in their ability to make investment decisions, thus making them reliant on the guidance of others.


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Stag is a short term spectator who buys and sells stocks very quickly, typically within a few hours of the day. These male deers, need huge cash to play the market at the speed that they do. They depend on taking advantage of small price movements.









Zebra as animals do not change their stripes. Thus, a Zebra of Wall Street is investor/ manager who sticks to the plan and rarely changes their strategies.





A vulture is a seller of securitized viaticals. Additionally, a vulture capitalist refers to an investor who buys companies in or near bankruptcy with a view to save them or one who buys the rights to a new product or invention in order to profit from its sale. It is derogatory as they deprive inventors of the money they would otherwise make.



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Taken from Aesops Fable of ‘the Scorpion and the Frog’, the scorpion can’t help but sting the frog because of its inherent nature to do so. Refers to the revelation that Wall Street time and again stings the entire nation in its quest for profits






Similar to when a Lion’s roar that everyone listens, Lion in Wall Street refers to persons of power. For example, when persons occupying top positions of let’s say, Morgan Stanley or Goldman Sachs talks, people listen.



[This Page will be updated regularly introducing various fundamental concepts in Securities Law]