Hedge funds are unregulated investment pools, usually funded by rich individuals and pension funds. To contain risk, they often “hedge”, ie, buy shares in Sainsbury's, but bet against a fall in Tesco shares.

A derivative is a bet “derived” from the performance of shares or some other asset. Futures and spread-betting, for instance. A company can buy a contract (a future) to purchase a commodity at a given price on a certain date.

The sub-prime market is the market for lending to borrowers with low incomes and poor credit histories who are deemed to be at high risk of not repaying their debts - and are therefore charged a higher rate of interest

Short selling is when speculators - often hedge funds - borrow shares, sell them and then buy them back at a lower price, before returning them to the original owner. But if the price goes up, they can face big losses, as banks did this week.

Fiscal stimulus is when a government cuts taxes or raises spending - or both - to boost demand in the economy.

Arbitrage is when someone profits from a price imbalance between two markets by buying in the cheaper and selling in the more expensive. Ticket-touting, for example.

Governments can use quantitative easing to increase the amount of money in the economy. This is done by buying assets, such as bonds, in what is called an open market operation.