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All glossary entries

national central bank (NCB)

A central bank of an EU Member State.

national competent authority (NCA)

A public authority or body officially recognised by national law, which is empowered by national law to supervise institutions as part of the supervisory system in operation in the Member State concerned.


net asset value


non-bank, non-insurance





NCB business day

Any day on which the national central bank of a specific Member State is open for the purpose of conducting Eurosystem monetary policy operations. In some Member States, branches of the national central bank may be closed on NCB business days owing to local or regional bank holidays. In such cases, the relevant national central bank is responsible for informing the counterparties in advance of the arrangements to be made for transactions involving those branches.


national designated authority

net credit cap

A limit placed on the credit exposure which a participant is allowed – or willing – to take on vis-à-vis all other participants or a given participant in the system as a result of sending/receiving payments which have not been settled. See also

net margining

A mechanism whereby the margin that a participant posts in a central counterparty (CCP) for its customers’ positions is the net total of the requirements for the individual customers. See also

net settlement

The settlement of transfer orders on a net basis. See also

net settlement system

A funds or securities transfer system which settles net settlement positions during one or more discrete periods, usually at pre-specified times in the course of the business day. See also

net stable funding ratio (NSFR)

The amount of available stable funding relative to the amount of required stable funding. Available stable funding is the portion of capital and liabilities that is expected to be stable over a one-year time horizon. The amount of funding required of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures. The NSFR should be equal to or higher than 100%.


In the context of clearing or settlement systems, the agreed offsetting of mutual obligations by participants in a system. This process involves the calculation of net settlement positions and their legal reduction to a (bilateral or multilateral) net amount. Netting may take several legal forms. See also

netting by novation

An agreement whereby obligations derived from individual transfer orders are netted and replaced by a new obligation. The parties to the new obligation may be the same as the parties to the existing obligation. Alternatively, in the context of some clearing house arrangements, there may be some substitution of parties. Antonym:

neutrality of money

A basic economic principle stating that in the long run changes in the money supply only lead to changes in nominal variables but not in real variables. Changes in the money supply will therefore have no long-term effect on variables such as real output, unemployment or real interest rates.

new business

An aggregate in MFI interest rate statistics that comprises any new agreement between a household or non-financial corporation and a credit or other institution, i.e. all financial contracts, the terms and conditions of which specify for the first time the interest rate on the deposit or loan, and all new negotiations of existing deposits and loans. Tacit renewals of existing deposit and loan contracts, i.e. renewals without any active involvement of the household or non-financial corporation concerned and not involving any renegotiating of the terms and conditions of the contracts, including the interest rate, are not considered new business.




net fee and commission income


net interest income

nominal effective exchange rate (EER) of the euro

Nominal euro EERs are weighted averages of bilateral euro exchange rates against the currencies of the euro area's main trading partners. The ECB publishes nominal EER indices for the euro against the currencies of a narrow and a broad group of trading partners. The weights used reflect the share of each partner country in euro area trade. See also


A person or entity named by another to act on its behalf. Nominees are commonly used in securities transactions to register and obtain legal ownership of securities.

non-clearing member

A member of a regulated market that uses a general clearing member to access a clearing house’s services. All trades must be settled through a clearing member. See also

non-financial corporation (NFC)

A corporation or quasi-corporation that is not engaged in financial intermediation but is active primarily in the production of market goods and non-financial services.

non-objection procedure

Standard decision-making process established by the SSM Regulation for the ECB’s supervisory activities. The ECB’s Supervisory Board takes draft decisions, which are submitted to the ECB’s Governing Council for adoption. Decisions are deemed to be adopted unless the Governing Council objects within a defined period of time, not exceeding ten working days.

non-performing loans (NPLs)

Under paragraph 145 of Annex V of the EBA ITS on Supervisory Reporting, these are loans that satisfy either or both of the following criteria: (a) material exposures which are more than 90 days past due; (b) the debtor is assessed as unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past-due amount or of the number of days past due.


Mechanisms providing evidence of: 1) the identity of the sender of a payment message; and 2) the integrity of that message. These are sufficient to prevent the sender of a message from successfully denying the submission of the payment message or the integrity of its contents.

non-seasonally adjusted (n.s.a.)

Not adjusted for seasonal and calendar effects. See also

non-standard measures

Measures taken by the ECB to support the effectiveness and transmission of interest rate decisions to the wider euro area economy in the context of a dysfunctional situation in some financial market segments and the financial system more broadly.

normative internal ICAAP perspective (normative perspective)

A multi-year ICAAP perspective under which the institution manages its capital adequacy by ensuring that it is able to fulfil all of its capital-related legal requirements and supervisory demands and cope with other internal and external capital constraints on an ongoing basis. A similar concept exists for the ILAAP. See also

normative perspective


nostro account

In correspondent banking, an account held by a customer bank on the books of another bank acting as a service provider. The other bank regards this account as a “loro account”. Antonym:


non-performing exposure




national resolution authority


national supervisory authority