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ECB glossary

Maastricht criteria


macroeconomic imbalance procedure (MIP)

A procedure aimed at broadening the surveillance of economic policies of the EU Member States to include a detailed and formal framework to prevent and correct excessive imbalances and to help the EU Member States affected to establish corrective action plans before divergences become entrenched. The MIP is based on Article 121(6) of the Treaty on the Functioning of the European Union. The first step of this surveillance procedure of the EU is the Alert Mechanism Report. The MIP has a preventive and a corrective arm. The latter is made operational by the excessive imbalance procedure. See also

market price

The price that is quoted for a gold, foreign exchange or securities instrument usually excluding accrued or rebate interest either on an organised market e.g. a stock exchange, or a non-organised market, e.g. an over-the-counter market.

Mediation Panel

A governance structure of the Single Supervisory Mechanism, established by the ECB according to Article 25 of the SSM Regulation, with a view to ensuring separation between monetary policy and supervisory tasks and to resolving differences of views expressed by the competent authorities of participating Member States concerned in cases where the Governing Council objects to a draft decision by the Supervisory Board. The panel includes one member per participating Member State, chosen from among the members of the Governing Council and the Supervisory Board, and decides by simple majority, with each member having one vote. See also

Member State

A country that is a member of the European Union.

Member State with a derogation

A Member State that is, as set out in Article 140 TFEU, preparing to adopt the euro, but has not yet done so. There are currently 7 Member States with this status: rights and obligations relating to the introduction of the euro as a single currency do not apply to them. The case of Denmark is different in that this Member State has been granted an exemption from participating in the third stage of Economic and Monetary Union.

mid-market price

The mid-point between the bid price and the offer price for a security based on quotations for transactions of normal market size by recognised market-makers or recognised trading exchanges. The mid-market price is used for the year-end revaluation procedure.

mid-market rate

The ECB daily concertation rate at 2.15 p.m., which is used for the year-end revaluation procedure.

minimum reserves

The minimum amount of reserves a credit institution is required to hold with a central bank. In the minimum reserve framework of the Eurosystem, the reserve requirement of a credit institution is calculated by multiplying the reserve ratio for each category of items in the reserve base by the amount of those items on the institution's balance sheet. In addition, institutions are allowed to deduct a lump-sum allowance from their reserve requirement. See also



monetary analysis

One pillar of the European Central Bank’s framework for conducting a comprehensive analysis of the risks to price stability, which forms the basis for the Governing Council’s monetary policy decisions. The monetary analysis helps to assess medium to long-term trends in inflation, in view of the close relationship between money and prices over extended horizons. The monetary analysis takes into account developments in a wide range of monetary indicators, including M3, its components and counterparts, notably credit, and various measures of excess liquidity. See also

monetary policy

Action undertaken by a central bank using the instruments at its disposal in order to achieve its objectives (e.g. maintaining price stability).

monetary policy strategy

The general approach to the conduct of monetary policy. The monetary policy strategy of the ECB comprises a quantitative definition of the primary objective of price stability and an analytical framework based on two pillars - economic analysis and monetary analysis - which forms the basis of the Governing Council's overall assessment of the risks to price stability and of its monetary policy decisions. It also provides the framework for explaining monetary policy decisions to the public.


An asset accepted by general consent as a medium of exchange. It may take, for example, the form of coins or banknotes or units stored on a prepaid electronic chip-card. Short-term deposits with credit institutions also serve the purposes of money. In economic theory, money performs three different functions: (1) a unit of account; (2) a means of payment; and (3) a store of value. A central bank bears the responsibility for the optimum performance of these functions and does so by ensuring that price stability is maintained.

money market

The market in which short-term funds are raised, invested and traded, using instruments which generally have an original maturity of up to one year.