All glossary entries



balance of payments (b.o.p.)
backup system
A system designed to replace the primary system in the event of the primary system being unable to function for whatever reason. See also
business continuity
balance of payments (b.o.p.)
A statistical system through which economic transactions occurring during specific time periods between an economy and the rest of the world can be summarised in a systematic way. The IMF’s Balance of Payments and International Investment Position Manual (BPM6) provides conceptual guidelines for compiling balance of payments statistics according to international standards. See also
capital account (in a b.o.p. context)
current account (in a b.o.p. context)
financial account (in a b.o.p. context)
Balance of Payments and International Investment Position Manual (BPM6)
The sixth edition of the IMF’s standard framework for statistics on the transactions and positions between an economy and the rest of the world.
Bank Recovery and Resolution Directive (BRRD)
Directive 2014/59/EU of the European Parliament and of the Council establishes a harmonised framework for the recovery and resolution of credit institutions and investment firms. It introduces harmonised tools and powers relating to prevention, early intervention and resolution for all EU Member States.
banking union
One of the building blocks for completing Economic and Monetary Union, which consists of an integrated financial framework with a single rulebook, a Single Supervisory Mechanism, common deposit protection and a single bank resolution mechanism. See also
Single Resolution Mechanism (SRM)
Single Supervisory Mechanism (SSM)
base money (monetary base)
Currency (banknotes and coins) in circulation plus the minimum reserves credit institutions are required to hold with the Eurosystem and any excess reserves they may voluntarily hold in the Eurosystem's deposit facility, all of which are liabilities on the Eurosystem's balance sheet. Base money is sometimes also referred to as the "monetary base".
Basel framework (Basel III)
A global regulatory framework for banks and banking systems, developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2008. Basel III builds upon the Basel II rulebook. Its aim is to strengthen the regulation, supervision and risk management of the banking sector. The measures aim to improve the banking sector's ability to absorb shocks arising from financial and economic stress, improve risk management and governance, and strengthen banks' transparency and disclosures.
Basel III
Basel framework (Basel III)
batch (bulk payments)
A group of orders (payment orders and/or securities transfer orders) to be processed together.
Basel Committee on Banking Supervision
A recipient of funds (payee) or securities. Depending on the context, a beneficiary can be a direct participant in a payment system and/or a final recipient.
Broad Economic Policy Guidelines (BEPGs)
Business Identifier Code (BIC)
bilateral exposure
One party’s exposure to another party. See also
bilateral net settlement system
A settlement system in which every individual bilateral combination of participants settles its net settlement position on a bilateral basis. See also
net settlement system
bilateral netting
An arrangement whereby two parties net their bilateral obligations. See also
multilateral netting
net settlement system
bilateral procedure
A procedure whereby the central bank deals directly with only one counterparty or a few counterparties on a one-to-one basis, without making use of tender procedures. Bilateral procedures include operations executed through stock exchanges or market agents.
bill of exchange
A written order from one party (the drawer) to another (the drawee) instructing it to pay a specified sum on demand or on a specified date to the drawer or a third party specified by the drawer. These are widely used to finance trade and, when discounted with a financial institution, to obtain credit.
Bank for International Settlements
A process preventing the transfer of a specified amount of funds or a specified quantity of a security.
bond market
The market for interest-bearing securities (with either a fixed or a floating rate and with a maturity of at least one year) that companies and governments issue to raise capital for investment. Fixed-rate bonds account for the largest share of this market.
book-entry system
A system which enables transfers of securities and other financial assets which do not involve the physical movement of paper documents or certificates (e.g. the electronic transfer of securities). See also
book-entry transaction
This term has two meanings. 1) In the field of securities, it refers to a transaction which is processed without the movement of physical certificates, being effected instead by means of credit and debit entries. 2) In the field of payments, it refers to a credit or debit entry made by a credit institution on the account of a customer in accordance with a general instruction issued by the customer (e.g. for a dividend payment or bank fees).
Balance of Payments and International Investment Position Manual (BPM6)
basis points
A particular payment product (especially a card) that has been licensed by its owner for use in a given territory.
Broad Economic Policy Guidelines (BEPGs)
Guidelines adopted by the EU Council in line with Article 121(2) TFEU to provide the framework for defining the economic policies of the Member States and of the Union. See also
Employment Guidelines
Integrated Guidelines
Bank Recovery and Resolution Directive (BRRD)
bulk payments
batch (bulk payments)
business continuity
A state of uninterrupted business operations. This term also refers to all of the organisational, technical and staffing measures employed in order to: 1) ensure the continuation of core business activities in the immediate aftermath of a crisis; and 2) gradually ensure the continued operation of all business activities in the event of sustained and severe disruption. See also
backup system
Business Identifier Code (BIC)
An international standard for identification of institutions within the financial services industry. The registration authority for BICs, which consist of eight or eleven contiguous characters, comprising a financial institution code (four characters), a country code (two characters), a location code (two characters) and, optionally, a branch code (three characters), is SWIFT.