Stuff you should know

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In a desperate attempt to stop salespeople going, “hey legal eagles, can you read this email for me”, and to counterpoint lackadaisical credit officers saying, “the question of whether we have credit risk to our own bank account is a legal question on which I can’t opine” we are running a snagging list of legal concepts about which no bank employee should plead ignorance. It is your job to know this stuff.

Stuff you should know, banker’s edition, then:

• The nature, if not necessarily the art of the deal: offer, acceptance and consideration;
• What an agent is, how agency works and why you can’t be agent for yourself;
• The nature of cash, why money is different from property;
• The difference between shares and bonds, where they fit in the capital structure and, indeed, what a capital structure is;
• What trusts are and why we use them;
• How bank accounts work, what indebtedness is and what banks do with your deposits (and no, it isn’t “put them in a safe in a jar with your name on it”);
• The difference between amendment and waiver;
• The difference between title transfer and pledge;
• What a discretionary trust is.

See also

Derivatives as explained to my neighbour Phil