Börsenlexikon: Consolidation

Definition 1: In corporate finance, consolidation means the conversion of short-term debt into long-term debt or equity; in public credit, also known as consolidation, the conversion of floating debt into longer-term (funded) bonds as well as the combination of several older bonds with different interest and repayment terms into a single overall bond with mostly more favourable terms (e.g. lower interest rate); in public budgeting, as budget consolidation, all fiscal policy measures to reduce a deficit by changing the level and structure of expenditure and revenue. Definition 2: Stabilisation of the development of securities in response to previous sharp price rises.