Glossary of Terms

B

Base Scenario

The most likely scenario based on current conditions and information. It serves as the reference point for evaluating alternative scenarios.

D

Divergence

The process by which different regions, markets, or sectors exhibit different trajectories and returns. Often refers to economic growth or monetary policy.

Downside Scenario

A scenario describing a potential negative development with worse conditions than the base scenario. Assessed with qualitative probabilities.

I

Inflation

The general increase in prices of goods and services in an economy. Described with qualitative terms such as "elevated," "moderate," "stable."

M

Macroeconomics

The branch of economics that studies the overall economy, including growth, inflation, unemployment, and fiscal and monetary policy.

Market Risk

The risk of losses due to changes in asset prices. In our approach, it is assessed qualitatively (low, moderate, elevated).

P

Probability

The assessment of how likely a scenario is to occur. Expressed qualitatively with terms such as "high," "medium," "low," "likely," "unlikely."

S

Scenario

A coherent description of a possible future state based on specific assumptions. Used to assess risks and opportunities.

Sector Rotation

The movement of capital between different sectors of the economy, usually in response to changes in the economic cycle or market conditions.

Structural Shifts

Long-term changes in the structure of the economy or markets that affect their functioning. Examples include demographic changes, technological progress, or geopolitical shifts.

Systemic Risk

The risk of collapse of an entire financial system, as opposed to the failure of individual entities. Assessed qualitatively based on vulnerabilities.

U

Upside Scenario

A scenario describing a potential positive development in markets or the economy, with better conditions than the base scenario. Expressed with probabilities like "low" or "medium."

V

Valuation

The process of determining the value of an asset based on fundamentals, comparative analysis, or other methods. In our context, we refer to qualitative assessments without specific prices.

Volatility

The degree of price fluctuation of an asset. Described qualitatively (low, moderate, high) without numerical measurements.