Question and Answer with Merrill Lynch's Joseph Jacobelli

Jul 222010

"Merrill Lynch hopes this Glossary will become the benchmark for financial terms in the Chinese market."

In an interview with ICFJ, Merrill Lynch's Joseph Jacobelli explains how the launch of "A Glossary of Financial Terms and Acronyms" will bring lasting results to business journalism in China.

Q: Your company has spent considerable resources preparing this glossary. Can you please share with us why it is a priority? And why now?

A: The financial world is becoming more complex and English financial terms are often translated literally and in a variety of ways into Chinese. This can lead to confusion, inaccuracies and general misunderstandings. With this Glossary of Financial Terms and Acronyms Merrill Lynch and Tsinghua University hope to standardize the usage of language in financial reporting and commentary.

This Glossary is by no means exhaustive, rather it is a starting point in what is the world’s fastest developing major marketplace. That’s why we are putting the Glossary online with a view to updating periodically to reflect the latest idioms and terms.

The reform and opening up of China since the late 1970s has ushered in an era of fast growth in business reporting in the news media – the number of media outlets has proliferated in the past five years. As the Chinese economy becomes more integrated into the world economy, in-depth, professional business reporting is becoming essential for the investment communities in China and abroad.

As part of its commitment to promoting professional reporting, Merrill Lynch, therefore, worked closely with Tsinghua University, to put together this English-Chinese Glossary of Financial Terms and Acronyms for students and practitioners.

Credit is due to the International Center for Journalists in the US for working with Tsinghua University and the sponsors to put together the business journalism program. It is from this initiative which began last year that this glossary has emerged.

Q: What will change if business people, journalists, financiers and officials understand business terms more clearly and define them the same way?

A. The professional training of future business journalists begins with learning the language for global business communication so that they have the vocabulary for covering hot topics such as corporate finance, mergers and acquisitions, and hedging risks in global capital markets. However, an English financial term or acronym is often translated into a confusing array of words and phrases in Chinese.

Creating a uniform usage of terms will help promote a better understanding of complex issues. New terms and phrases in the areas of the environment, alternative investments and derivatives are constantly coming into usage.

Common usage of terms will also help foster transparency.

Q: Based on your experiences in many countries, what role do you find that business journalism plays in the global economy and its development?

A: Merrill Lynch is a global firm with offices in 40 countries and territories worldwide. Business journalism plays an important role in a world that has become globalized. Instant reportage of what happens – with the coverage beamed live to all parts of the world – has changed the way businesses respond. At Annual General Meetings, press conferences and interviews, the news that stems from these events can have a dramatic affect on share prices and a company’s future. Having journalists that are savvy, well-informed and using consistent language that isn’t open to misinterpretation facilitates the development of quality reporting.

Q: In the broadest terms, what do you hope will be the impact of this work?

A: Merrill Lynch hopes this Glossary will become the benchmark for financial terms in the Chinese market. Promoting professional reporting, especially in emerging markets like China, is important because it assists in transparency, understanding and the overall development of the market. As a company with global, regional and local capabilities, Merrill Lynch tries to serve the communities where we live and work through developing targeted programs focused on education, leadership and the environment.

We hope this glossary will be of benefit to the reporters, businesses and the financial community in China and beyond. This is part of a series of CSR initiatives that Merrill Lynch has developed with China over many years.

Below are some other programs that Merrill Lynch is involved with to help building a sustainable and harmonious society:

Carbon Disclosure Project
Merrill Lynch is a founding member of the Carbon Disclosure Project (CDP), the world’s largest investor collaboration on climate change. In March 2008, the firm announced a three year global partnership to support CDP’s development and growth worldwide. Merrill Lynch recognizes how important it is for companies to provide details about their carbon emissions and energy use and we have responded to the CDP's survey since its inception. In Asia, CDP partners with Asria and in 2007 several Chinese companies were involved in the survey.

Merrill Lynch partners with a number of leading organizations to promote environmental sustainability and, in particular, advocate for market-based solutions to environmental problems. For example: In November 2007, Merrill Lynch became a signatory to the Bali Communique calling for a comprehensive, legally binding United Nations framework to tackle climate change.

Merrill Lynch is a member of the International Emissions Trading Association which is dedicated to ensuring that the objectives of the United Nations Convention on Climate Change and ultimately climate protection are met through the establishment of effective systems for trading in greenhouse gas emissions by businesses, in an economically efficient manner while maintaining societal equity and environmental integrity.

Merrill Lynch is a member of the Carbon Markets Association which was formed to represent businesses at the cutting edge of the UK services sector working to reduce carbon emissions through the market mechanism of the United Nations Kyoto Protocol. It was created to promote growth and stability in the Carbon Market and to enhance London's competitiveness in the Climate Change sector.

China Environmental Solutions
Merrill Lynch closed a $13 million preferred equity deal for China Environmental Solutions, a company that builds and operates cleaning terminals for ISO chemical tanks in China. The demand for chemical tanks in China is experiencing high growth and the market for cleaning services that meet international environmental standards is currently under served. CES is the leading owner and operator of cleaning depots in China that meets stringent international environmental standards.

Trina Solar Limited
Merrill Lynch invested $10 million in convertible preferred shares in Trina Solar, a well known Chinese manufacturer of high quality monocrystalline modules. The firm has a long history as a solar technology pioneer. Trina Solar's modules provide reliable and environmentally friendly electric power for residential, commercial, industrial and public utility applications worldwide. The company listed successfully on the New York Stock Exchange and continues to be one of the leading PV manufacturers in the world.

Q: Any further thoughts?

Merrill Lynch, a founding sponsor of the GBJ program, recognizes the importance for China to position itself to benefit from the remarkable regional economic growth. It strives to help nurture the next generation of Chinese journalists so that they can better understand and report on China’s growing role within the increasingly complex business world.

The International Center for Journalists and Tsinghua University in Beijing launched China’s first Global Business Journalism Program on September 17, 2007. The initiative includes a two-year master’s degree program and professional trainings for working journalists from around the country.The founding sponsors of the program are Merrill Lynch, the John S. and James L. Knight Foundation, Bloomberg, and Deloitte Touche Tohmatsu, which form a unique partnership between business and media organizations.