onomi     on epts and erminolo ies       22.5
               good-will, credit-worthiness, knowledge,    different economies (i.e., countries) borrow each
               know-how, etc.                              other’s currency and agree to repay (such loans)
        (iii) Financial Assets: All financially valid      at a specified future date. Each company gets full
               valuables other than tangibles and          amount of the loan on the repayment date in their
               intangibles such as currencies, bank        domestic currency without any risk of losses due
               deposits, bonds, securities, shares, etc.   to exchange rate fluctuations. It has developed
                                                           as a popular tool of minimising the exchange-
        AssigneD revenue                                   rate exposure risk among the multi-national
                                                           companies. This is also known as the parallel loan.
     The term is used to refer to various tax/duty/
     cess/surcharge/levy etc., proceeds of which are
     (traditionally) collected by state government (on        bAD bAnk
     behalf of) local bodies (the PRIs), and subsequently  A bank created specially to buy the bad debts
     adjusted with / assigned to the PRIs. Collection of
                                                           (called ‘non-performing assets’ in India) of the
     such revenue is governed by relevant Acts of the
                                                           existing banks to clear such loans of the latter.
     local bodies.
                                                           This way the banks with NPAs clear their ‘balance
          Some examples of assigned revenue in India,
                                                           sheet’ and again start lending to the customers.
     include, entertainment tax, surcharge on stamp
                                                           The bad bank now tries to recover the bad debts it
     duty, local cess/surcharge on land revenue, lease
     amount of mines and minerals, sale proceeds of        has bought through available legal means. Though
     social forestry plantations, etc. State Finance       such banks were set up in 20th century itself in the
     Commissions recommend devolution of assigned          USA, it came in recent use once the US central
     revenue to local bodies on objective criteria, which  banks’ chief (Ben Bernanke) proposed the idea
     may be specified by them in specific context.         of using a government-run bad bank to clean up
                                                           the ‘sub-prime’ loans of the private banks in the
        AutArky                                            country (in wake of the sub-prime crisis of 2007).
                                                                It made news in India once the Economic Survey
     The idea of self-sufficiency and ‘no’ international
                                                           2016-17 suggested the Government of India to set
     trade by a country. None of the countries of the
     world has been able to produce all the goods and      such a body— public sector asset rehabilitation
     services required by its population at competitive    agency (PARA)—to solve the ‘twin balance sheet’
     prices, however, some tried to live it up at the cost (TBS) problem the country is faced with. At one
     of inefficiency and comparative poverty.              hand the public sector banks are faced with high
                                                           NPAs while on the other the corporate sector (who
        bAckwArDAtion                                      are the borrowers of these banks) of the country
                                                           is also hit with negative balance sheet (unable to
     A term of future trading which means a commodity      service or clear the loans due on them). The PARA
     is valued higher today (i.e., spots market) than      is supposed to clear the balance sheets of both
     in the futures (i.e., future market). When the
                                                           banks as well the corporate sector. The Survey has
     situation is opposite, it is known as contango.
                                                           quoted the South East Asian economies where
                                                           such agencies were used very effectively during
        bAck-to-bAck loAn
                                                           the currency crises of 1996-97. By March 2017, it
     A term of international banking, is an arrangement    looked that the Government was prepared to set
     under which two firms (i.e., companies) in            up such an agency (bank).