Have you ever been stumped not by the complexity of a financial situation, but by a bit of jargon used by insiders to describe it?

Thisismoney.co.uk has a very helpful online A-Z guide to terms used in the financial services and banking sectors.

For example:

Arbitrage
Seeking to exploit tiny price differences in securities between different stock markets. A high-risk, high-reward business for professional investors with millions to play with.

Credit crunch
A credit crunch happens when banks hoard cash. If the supply of loans evaporates, the economic outlook quickly becomes bleak. Ther credit crunch that began in August 2007 was sparked by bad loans in America’s mortgage market – sub-prime borrowing. It can be measured by the level of Libor – the interbank lending rate.

Tax efficient
An investment that is designed to take advantages of tax breaks. This is a good idea, but investing solely to take advantage is unwise. Better to keep an eye on the big picture and ask yourself whether you would invest if the tax break were not there.

In the present news climate it’s a good idea to scan through the list and update your knowledge of any unfamiliar terms, or those you hear frequently but wonder what they mean.

Equally, when a word or phrase suddenly arises, as “credit crunch” did on August 9 last year, this is a good place to go to check its meaning.

A-Z of Financial Terms and Jargon.