Export Business

A financial export is a business service provided by a domestic firm (regardless of ownership) to a foreign firm within the scope of financial services. While financial services are often seen as a domestic service (such as current accounts, mortgages, cashpoints, etc.) the growing international nature of finance means that many services are now being handled abroad or in financial centres, for a variety of reasons. Financial exports include a wide range of activities from insurance to banking and brokerage. Many smaller locations (such as Bermuda, Luxembourg, and the Cayman Islands) lack sufficient size for a domestic economy, thus requiring them to look abroad for markets. The increasing competitiveness of financial services has meant that many countries which were self-sufficient or protectionist have become increasingly reliant on financial service imports (such as the United States and Japan).

Dispersion is a measure for the statistical distribution of portfolio returns. It is the asset-weighted standard deviation of individual portfolio returns within a comparable client group (composite) from the composite return. A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan. This allows the borrower to accurately predict their future payments. Variable rate loans, by contrast, are anchored to the prevailing discount rate.

A fixed interest rate is based on the lender's assumptions about the average discount rate over the fixed rate period. For example, when the discount rate is historically low, fixed rates are normally higher than variable rates because interest rates are more likely to rise during the fixed rate period. Conversely, when interest rates are historically high, lenders normally offer a discount to borrowers to fix their interest rate over time, as rates are more likely to fall during the fixed rate period.

Some fixed interest loans - particularly mortgages intended for the use of people with previous adverse credit - have an 'extended overhang', that is to say that once the initial fixed rate period is over, the person taking out the loan is tied into it for a further extended period at a higher interest rate before they are able to redeem it.