Keynesian economics: The economics of John Maynard Keynes. In modern political parlance, the belief that the state can directly stimulate demand in a stagnating economy. For instance, by borrowing money to spend on public works projects like roads, schools and hospitals.

Leveraging: Leveraging, or gearing, means borrowing money in order to invest. The more you borrow on top of the funds (or equity) you already have, the more highly leveraged you are. Leveraging can maximize both gains and losses. Deleveraging means reducing the amount you owe.

Liquidity: The liquidity of something is how easy it is to convert it into cash. Your current account, for example, is more liquid than your house. If you needed to sell your house quickly to pay bills you would have drop the price substantially to get a sale.

Liquidity squeeze: When an entity lacks the financial capital to pay its obligations in a timely manner, it is said to be suffering a liquidity squeeze. Currently, many nations are pumping billions into their banks to protect them from such a squeeze.

LIBOR: The rate that international banks charge for short-term loans to each other. Libor, an acronym for the London Interbank Offered Rate, is calculated every business day.

Loans-to-deposit: For financial institutions, the sum of their loans divided by the sum of their deposits. Currently important because using other sources to fund lending is getting more expensive.

Mark-to-market: Recording the value of an asset on a daily basis according to current market prices. So for a futures contract, what it would be worth if realized today rather than at the specified future date.

Money markets: Global markets dealing in borrowing and lending on a short-term basis.

Monoline insurance: Monolines were set up in the 1970s to insure against the risk that a bond will default. Companies and public institutions issue bonds to raise money. Paying a fee to a monoline to insure their debt helps to raise the credit rating of the bond which in turn means they can raise the money more cheaply.

Moratorium: A suspension of specific, or all, business activities to prevent additional damage. Sometimes a moratorium can be decreed by a nation. Sometimes a business can enact a moratorium on its own. In bankruptcy law, a legally binding halt of the right to collect debt.

Mortgage-backed security: A bond backed by home or commercial mortgage payments. These provide income from payments of the underlying mortgages.

Naked short selling: A version of short selling, illegal or restricted in some jurisdictions, where the trader does not first establish that he is able to borrow the relevant asset.

Nationalization: The practice of a government to partially or wholly take control of the assets and administration of a private entity.

Negative equity: Refers to a situation in which the value of your house is below the amount of the mortgage that still has to be paid off.