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All glossary entries


Standard & Poor’s

safekeeping services

The holding of physical securities on behalf of other parties.

same-day funds

Funds which the recipient is entitled to transfer or withdraw from an account on the day of receipt. See also intraday liquidity


sovereign bond-backed security


Technique for managing payment queues by determining the order in which payments are accepted for settlement. See also queuing


See sectoral capital requirements (SCR)


Solvency Capital Requirement


See special drawing right (SDR)

seasonally adjusted (s.a.)

Modified using a statistical technique designed to remove the effects of seasonal variations on a time series. Seasonal variations repeat themselves at around the same time every year and have a similar effect on the time series. A series may also be affected by calendar situations such as moving holidays (e.g. Easter). Time series with seasonal and calendar effects are usually adjusted for both.

secondary income (in a b.o.p. context)

An item in the current account pertaining to those current transfers between residents and non-residents that directly affect the level of gross national disposable income and thus influence the economy’s ability to consume goods and services.

secondary site

A location other than the primary site which systems can use to resume their business operations and other functions in the event of a disaster.

sectoral capital requirements (SCR)

The prudential rules for the EU banking system provide for the use of more targeted capital-based tools designed to address vulnerabilities that can appear at sectoral level. They can take the form of stricter requirements for loss given default and higher real estate risk weights, which have been implemented via Articles 124, 164 and 458 CRR.

Securities Markets Programme

Interventions by the Eurosystem in public and private debt securities markets in the euro area to ensure depth and liquidity in those market segments that are dysfunctional. The objective is to restore an appropriate monetary policy transmission mechanism, and thus the effective conduct of monetary policy oriented towards price stability in the medium term. The impact of these interventions is sterilised through specific operations to re-absorb the liquidity injected and thereby ensure that the monetary policy stance is not affected.

securities settlement system (SSS)

A system which allows the transfer of securities, either free of payment (FOP) or against payment (delivery versus payment).


The pooling of financial assets, such as residential mortgage loans, and their subsequent sale to a special-purpose vehicle, which then issues fixed income securities for sale to investors. The principal and interest of these securities depend on the cash flows produced by the pool of underlying financial assets.

security-by-security data collection

The collection of data broken down into individual securities.


A method of protecting a client’s assets by holding them separately from those of the custodian (or other clients, as the case may be).


See Supervisory Examination Programme (SEP)


See Single Euro Payments Area (SEPA)

service provision

Function within an electronic payment instrument scheme that relates to any payment service, crypto-asset service or technical service provided to end users within the scheme.

services (in a b.o.p. context)

An item in the current account covering services produced through an arrangement made between a producer in one economy and a consumer or group of consumers in another, prior to the time production occurs.

set of formal, standardised and common rules

A set of rules covering all material aspects governing an electronic payment instrument scheme which is uniform throughout the scheme, irrespective of whether the rules are based on a multilateral agreement, general terms and conditions or standardised bilateral contracts. These rules typically cover a common name and/or logo.


The completion of a transaction or of processing with the aim of discharging participants’ obligations through the transfer of funds and/or securities. A settlement may be final or provisional. See also final settlement, gross settlement, net settlement, provisional settlement

settlement account

An account held at a central bank or a central securities depository, or with a central counterparty or any other institution acting as a settlement agent, which is used to settle transactions between participants in a system.

settlement agent (settlement institution)

The institution across whose books transfers between participants take place in order to achieve settlement within a settlement system. See also bilateral net settlement system, multilateral net settlement system, settling participant

settlement asset

An asset or a claim on an asset that is accepted by a beneficiary in order to discharge a payment obligation.

settlement bank

See settling participant (settlement bank; settling member)

settlement cycle (settlement interval)

In the field of securities, the time period that elapses between the trade date and the settlement date.

settlement date

See settlement day (settlement date)

settlement day (settlement date)

The day on which settlement actually takes place.

settlement failure

The inability of a participant to meet its settlement obligations in a system. This inability may be temporary or permanent. See also default, failed transaction

settlement institution

See settlement agent (settlement institution)

settlement interval

See settlement cycle (settlement interval)

settlement lag (payment lag)

In a transfer system, the time lag between the acceptance of the transfer order by the system and its final settlement. In an exchange-for-value system, the time lag between entering into a trade/bargain and finally exchanging the financial asset for payment.

settlement obligation

The requirement, as a result of the settlement process, that a participant in a settlement system effect payment or deliver assets.

settlement risk

The risk that settlement in a transfer system will not take place as expected, usually owing to a party defaulting on one or more settlement obligations. This risk includes, in particular, operational risks, credit risks and liquidity risks. See also credit risk, liquidity risk, operational risk

settlement system

A system used to facilitate the settlement of transfers of funds, assets or financial instruments. See also funds transfer system, securities settlement system

settling member

See settling participant (settlement bank; settling member)

settling participant (settlement bank; settling member)

A participant which maintains one or more accounts with a settlement agent in order to settle funds or securities transfers on its own behalf or, potentially, for other market participants. See also settlement agent, tiering arrangement


securities financing transaction


See Stability and Growth Pact (SGP)


See significant institution (SI)


The criterion that determines the allocation of supervisory responsibilities to the ECB or the national competent authorities within the Single Supervisory Mechanism. See also significant institution (SI)

significant institution (SI)

The criteria for determining whether banks are considered significant – and therefore under the ECB’s direct supervision – are set out in the SSM Regulation and the SSM Framework Regulation. To qualify as significant, banks must fulfil at least one of these criteria. Notwithstanding the fulfilment of the criteria, the SSM may declare an institution significant to ensure the consistent application of high-quality supervisory standards.

significant supervised entity

A supervised entity that fulfils certain criteria regarding size, importance for the economy of the EU or any participating Member State or significance of its cross-border activities. All other supervised entities have to be considered less significant supervised entities. See also Single Supervisory Mechanism (SSM), supervised entity


systemically important institution

Single Euro Payments Area (SEPA)

A process initiated by European banks and supported, inter alia, by the Eurosystem and the European Commission with a view to integrating retail payment systems and transforming the euro area into a true domestic market for the payment industry.

single rate auction (Dutch auction)

An auction in which the allotment interest rate (or price/swap point) applied for all satisfied bids is equal to the marginal interest rate. See also variable rate tender

Single Resolution Mechanism (SRM)

A mechanism proposed by the European Commission, which establishes uniform rules and a uniform procedure for the resolution of credit institutions established in the banking union. It is envisaged that it will be composed of a single resolution board and national resolution authorities in participating Member States, with ultimate decision-making power at the European level. For the purposes of resolution, the SRM will have at its disposal a single resolution fund. The SRM is a necessary complement to the Single Supervisory Mechanism in order to achieve a well-functioning banking union. See also Single Supervisory Mechanism (SSM)

Single Rulebook

A single set of harmonised prudential rules which credit institutions must respect throughout the EU, including legislation such as the Capital Requirements Regulation and the Capital Requirements Directive. Beyond the legislation elaborated by the European Parliament and the EU Council with the assistance of the European Commission, the European Banking Authority has the authority to further develop the Single Rulebook and monitor its implementation.

Single Supervisory Mechanism (SSM)

A mechanism composed of the ECB and national competent authorities in participating Member States for the exercise of the supervisory tasks conferred upon the ECB. The ECB is responsible for the effective and consistent functioning of this mechanism, which forms part of European banking union.

Single Supervisory Mechanism Regulation (SSMR)

The legal act creating a single supervisory mechanism for credit institutions in the euro area and, potentially, other EU Member States, as one of the main elements of Europe’s banking union. The SSM Regulation (EU) No 1024/2013 confers on the ECB specific tasks concerning policies relating to the prudential supervision of credit institutions and macroprudential policy.


See systemically important payment system (SIPS)


Five regulations and one directive that entered into force on 13 December 2011 to strengthen the Stability and Growth Pact. The four fiscally-related legislative acts are aimed at strengthening budgetary surveillance and coordination of economic policies, speeding up and clarifying the implementation of the excessive deficit procedure, and ensuring the effective enforcement of budgetary surveillance in the euro area and the requirements for the fiscal frameworks of the Member States. The two macroeconomic-related legislative acts are aimed at preventing and correcting macroeconomic imbalances and at allowing enforcement action to correct excessive macroeconomic imbalances in the euro area. See also excessive deficit procedure (EDP)

smart card

See chip card (smart card)


small and medium-sized enterprises

social security funds

A sector defined in the ESA 2010 as comprising all central, state and local institutional units, the principal activity of which is to provide social security benefits and which fulfil both of the following two criteria: (i) certain groups of the population are required by law or by regulation to participate in the scheme or to pay contributions; and (ii) the general government is responsible for the management of the scheme.

solvency risk

The risk of loss owing to the failure (bankruptcy) of an issuer of a financial asset or to the insolvency of the counterparty.

special drawing right (SDR)

An international reserve asset created by the IMF to supplement other reserve assets that are periodically allocated to IMF members in proportion to their respective quotas. SDRs are not considered liabilities of the Fund, and IMF members to whom SDRs are allocated do not incur actual (unconditional) liabilities to repay SDRs allocated.

specialised depository

An entity, usually a credit institution, that provides international central securities depositories (ICSDs) with safekeeping and asset servicing for physical certificates (“individual notes”) that represent shares in international debt instruments (e.g. Eurobonds). See also common depository


special-purpose vehicle


Supervisory Quality Assurance


See systemic risk buffer (SRB)


Single Resolution Board


See Supervisory Review and Evaluation Process (SREP)


Single Resolution Fund


See Single Resolution Mechanism (SRM)


Single Resolution Mechanism Regulation


SSM Simplification Group


See Single Supervisory Mechanism (SSM)

SSM Framework Regulation (SSMFR)

The regulatory framework setting out the practical arrangements concerning the cooperation between the ECB and the national competent authorities within the Single Supervisory Mechanism: Regulation (EU) No 468/2014.

SSM Regulation

See Single Supervisory Mechanism Regulation (SSMR)


See SSM Framework Regulation (SSMFR)


See Single Supervisory Mechanism Regulation (SSMR)


See securities settlement system (SSS)

Stability and Growth Pact (SGP)

The Stability and Growth Pact consists of two EU Council Regulations, on "the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies" and on "speeding up and clarifying the implementation of the excessive deficit procedure", and of a European Council Resolution on the Stability and Growth Pact adopted at the Amsterdam summit on 17 June 1997. More specifically, budgetary positions close to balance or in surplus are required as the medium-term objective for Member States since this would allow them to deal with normal cyclical fluctuations while keeping their government deficit below the reference value of 3% of GDP. In accordance with the Stability and Growth Pact, countries participating in EMU will submit annual stability programmes, while non-participating countries will continue to provide annual convergence programmes.

stability programmes

These are medium-term government plans and assumptions provided by euro area countries regarding the development of key economic variables with a view to the achievement of the medium-term objective of a budgetary position close to balance or in surplus as referred to in the Stability and Growth Pact. These programmes present measures for the consolidation of fiscal balances as well as the underlying economic scenarios. Stability programmes must be updated annually. They are examined by the European Commission and the Economic and Financial Committee (EFC). Their reports serve as the basis for an assessment by the ECOFIN Council, focusing in particular on whether the medium-term budgetary objective in the programme is in line with a budgetary position close to balance or in surplus, providing for an adequate safety margin to ensure that an excessive deficit is avoided. Countries whose currency is not the euro must submit annual convergence programmes, in accordance with the Stability and Growth Pact. See also Council of the European Union (EU Council), Economic and Financial Committee (EFC), Stability and Growth Pact (SGP)

Stage One

See Economic and Monetary Union (EMU)

Stage Three

See Economic and Monetary Union (EMU)

Stage Two

See Economic and Monetary Union (EMU)

standard tender

A tender procedure used by the Eurosystem in its regular open market operations. Standard tenders are carried out within 24 hours. All counterparties fulfilling the general eligibility criteria are entitled to submit bids.

standardised deduction

The fixed percentage of the amount outstanding of debt securities with an agreed maturity of up to two years (including money market paper) which can be deducted from the reserve base by issuers that cannot present evidence that such outstanding amount is held by other institutions subject to the minimum reserve system of the Eurosystem, by the ECB or by a national central bank. See also minimum reserves, reserve base

standing facility

A central bank credit facility available to counterparties at their own initiative. The Eurosystem offers two overnight standing facilities: the marginal lending facility and the deposit facility. See also deposit facility, marginal lending facility

standing order

An instruction from a customer to its bank to make a regular payment of a fixed amount to a named beneficiary.

start date

The date on which the first leg of a monetary policy operation is settled. The start date corresponds to the purchase date for operations based on repurchase agreements and foreign exchange swaps.

state government

A sector defined in the ESA 2010 as comprising separate institutional units exercising some of the functions of government (excluding the administration of social security funds) at a level below that of the central government and above that of local government.


Short Term Exercise

stock market

See equity market


See straight-through processing (STP)

straight line depreciation/amortisation

Depreciation/amortisation over a given period is determined by dividing the cost of the asset, less its estimated residual value, by the estimated useful life of the asset pro rata temporis.

straight-through processing (STP)

The automated end-to-end processing of trades/payment transfers – including, where relevant, the automated completion of confirmation, matching, generation, clearing and settlement of orders.

strip (separate trading of interest and principal)

A zero-coupon bond created in order to trade separately the claims on particular cash flows of a security and the principal of the same instrument.

structural operation

An open market operation executed by the Eurosystem mainly in order to adjust the structural liquidity position of the financial sector vis-à-vis the Eurosystem.


Supervisory Banking data system

substitution of securities

A situation in which an institution which has provided securities as collateral recalls them and replaces them with other securities of equivalent market value.

supervised entity

Any of the following: (a) a credit institution established in a participating Member State; (b) a financial holding company established in a participating Member State; (c) a mixed financial holding company established in a participating Member State, provided that it fulfils the conditions laid down in point (21)(b); (d) a branch established in a participating Member State by a credit institution which is established in a non-participating Member State. See also significant supervised entity, Single Supervisory Mechanism (SSM)

Supervisory Board

An internal body of the ECB that undertakes the planning and execution of the tasks conferred on the ECB relating to the prudential supervision of credit institutions. The Supervisory Board is composed of a Chair, a Vice-Chair, four representatives of the ECB and one representative of the national competent authority in each participating Member State of the Single Supervisory Mechanism. See also Single Supervisory Mechanism (SSM)

Supervisory Examination Programme (SEP)

For each significant bank, the Joint Supervisory Team produces a Supervisory Examination Programme, which sets out the main supervisory tasks and activities for the following 12 months, their tentative schedules and objectives and the need for on-site inspections and internal model investigations.

Supervisory Manual

A manual detailing the general principles, processes and procedures as well as the methodology for the supervision of significant and less significant banking institutions, taking into account the principles for the functioning of the Single Supervisory Mechanism (SSM). It describes the procedures for cooperation within the SSM and with authorities outside the SSM.

Supervisory Review and Evaluation Process (SREP)

The process used to guide the supervisory review of significant and less significant credit institutions and to determine whether (on top of minimum requirements) possible additional requirements should be applied with respect to own funds, disclosure or liquidity, or whether any other supervisory measures should be applied.

survivors pay

A loss-sharing arrangement which, in the event of a participant’s inability to settle, requires losses to be borne by the other (non-defaulting) participants in accordance with a predetermined formula. Antonym: defaulter pays


stressed value at risk


An agreement to exchange future cash flows according to a prearranged formula. See also foreign exchange swap

swap point

The difference between the exchange rate of the forward transaction and the exchange rate of the spot transaction in a foreign exchange swap.

symmetry of the ECB's inflation target

The fact that negative and positive deviations of inflation from the ECB’s target of 2% over the medium term are considered equally undesirable. When interest rates are close to their effective lower bound, maintaining this symmetry requires especially forceful or persistent monetary policy measures to be taken to avoid negative deviations from the inflation target becoming entrenched. This may also imply a transitory period in which inflation is moderately above target. See also effective lower bound (ELB), price stability

systemic risk

The risk that the inability of one participant to meet its obligations in a system will cause other participants to be unable to meet their obligations when they become due, potentially with spillover effects (e.g. significant liquidity or credit problems) threatening the stability of or confidence in the financial system. That inability to meet obligations can be caused by operational or financial problems.

systemic risk buffer (SRB)

A capital buffer applied to the financial sector or to one or more subsets of the sector, in order to prevent and mitigate long-term non-cyclical systemic or macroprudential risks. It has been implemented in Europe via Article 133 CRD IV and must amount to at least 1% of the targeted risk exposure amount to be met with CET1 capital and can be applied to all exposures or to a subset of exposures. A special notification procedure must be followed in order to set the buffer at rates between 3% and 5%. Buffer rates above 5% are possible, but also require special authorisation (e.g. a Commission implementing act).

systemically important payment system (SIPS)

A payment system which has the potential to trigger systemic risks in the event of it being insufficiently protected against the risks to which it is exposed.