Meridian Bank uses real banking concepts, and understanding them makes you a sharper player — and, honestly, a more informed reader of the financial news. Here's a plain-English definition of every important term in the game, with a note on how each one works in play. Terms are grouped by theme.
The balance sheet
Assets
Everything your bank owns or is owed: cash reserves, the loans you've made, your investments, and your business ventures. Assets generate income.
Liabilities
Everything your bank owes. For a bank, the biggest liability is deposits — customer money you must return on demand.
Equity
Assets minus liabilities: the portion of the bank that truly belongs to you. Equity is your score in Meridian Bank. Growing it past $10 million is the first win; reaching $1 billion makes you "Too Big To Fail."
Balance sheet
The snapshot of assets, liabilities, and equity at a point in time. In the game it's the panel you'll check most often.
Insolvency
The state where liabilities exceed assets and equity falls to zero. In Meridian Bank, insolvency ends the run — the bank has failed.
Deposits & reserves
Deposit
Money a customer places with the bank. It funds your lending, but it's a liability because depositors can withdraw it.
Deposit rate
The annual interest you pay savers. Raise it to attract deposits from your rival; lower it to cut costs. It's one of your main strategic levers.
Reserves
The cash you keep on hand rather than lending or investing. Reserves earn a small interbank yield (around 2.2% a year) and, more importantly, let you honor withdrawals.
Reserve ratio
Reserves divided by deposits — the share of deposits held as cash. Regulators require a minimum of 10%. Fall below it and you're fined; run out of cash entirely and you fail. This is the most important number to watch.
Liquidity
How quickly you can turn assets into spendable cash. Cash and T-bills are highly liquid; loans are not — you can't call them back early. A bank can be solvent yet still fail from a lack of liquidity.
Bank run
A wave of depositors demanding their money back at once — up to roughly 40% of deposits in a single quarter. If you can't cover the withdrawals, the run is fatal. The classic reason "too big to fail" banks are feared.
Advertisement
Lending
Loan
Money lent to a borrower who repays it, with interest, over a fixed term. Lending is how a bank earns most of its money — if the borrower pays.
Interest rate
The percentage a borrower pays you (or you pay depositors) for the use of money. Riskier borrowers pay higher rates to compensate you for the chance they default.
Term
The length of a loan, measured in quarters. Longer terms (like a 20-quarter mortgage) lock up your cash longer; shorter terms return it sooner.
Credit score
A measure of a borrower's reliability. High scores rarely default; low scores default often. It's your single best signal when deciding whether to approve a loan.
Default
When a borrower stops repaying. You then recover only part of the loan — about 60% of the collateral — and book a loss on the rest.
Collateral
An asset backing a loan (like a house behind a mortgage). If the borrower defaults, seizing and selling collateral is how you recover part of your money.
Loan types
Meridian Bank offers Mortgages, Business Loans, Auto Loans, Personal Loans, and Credit Lines — ordered roughly from largest and safest to smallest and riskiest.
Investments
Treasury Bills (T-bills)
Short-term government debt: very low risk, low yield, highly liquid. Your safe harbor in a recession and a place to hold cash you may need soon.
Corporate bonds
Debt issued by companies: moderate risk, roughly 7% average yield. Their value rises when the Fed cuts rates and falls when rates rise.
Equities
Company stock: high risk, cyclical reward. Equities can surge in a market rally and crash in a downturn, so hold them only with money you don't need for reserves.
APY (Annual Percentage Yield)
The yearly rate of return on an investment or deposit, including compounding. A quick way to compare how hard your money is working.
Volatility
How much an investment's value swings. T-bills have low volatility; equities have high volatility. Higher volatility means higher potential reward and higher risk of a painful quarter.
Growth & regulation
Merger & Acquisition (M&A)
Buying another bank to absorb its deposits and scale instantly. Fast growth, but it costs cash up front and can import the target's bad loans.
Business venture
A larger, longer-term investment that diversifies your income and builds enterprise value beyond ordinary lending.
Reputation
How the market views your bank. Strong reputation helps you attract deposits and weather events; scandals and complaints erode it.
Regulatory fine
A penalty (at least $50,000) for breaking the rules — most commonly for letting your reserve ratio fall below the required floor.
Stress test
A regulator's check that a large bank could survive a severe downturn. Failing one is a warning to rebuild capital.
Too Big To Fail
A bank so large that its collapse would threaten the whole system. In the game, crossing $1 billion in equity earns this status — along with a capital surcharge and a new set of high-stakes systemic events. It's also where the game's domain name comes from.
Now that the vocabulary makes sense, put it to work.