Glossary
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Economic analysis
One pillar of the ECB’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 economic analysis focuses mainly on the assessment of current economic and financial developments and the implied short to medium-term risks to price stability from the perspective of the interplay between supply and demand in goods, services and factor markets at those horizons. In this respect, due attention is paid to the need to identify the nature of shocks affecting the economy, their effects on cost and pricing behaviour and the short to medium-term prospects for their propagation in the economy (see also monetary analysis).

Economic and Financial Committee (EFC)
This committee consists of the Treasury directors, the persons who are second in command of the national central banks of the European Union, two representatives from the European Central Bank and two from the European Commission (34 members altogether). It is responsible for preparing the meetings of the EU Finance Ministers and those of the Eurogroup.

Economic and Monetary Union (EMU)
The Maastricht Treaty describes the process of achieving EMU in the European Union (EU) in three stages. Stage One of EMU started in July 1990 and ended on 31 December 1993; it was mainly characterised by the dismantling of all internal barriers to the free movement of capital within the EU. Stage Two of EMU began on 1 January 1994. It provided for, inter alia, the establishment of the European Monetary Institute (EMI), the prohibition of financing of the public sector by the central banks, the prohibition of privileged access to financial institutions by the public sector and the avoidance of excessive government deficits. Stage Three started on 1 January 1999 with the transfer of monetary competence to the ECB and the introduction of the euro. The cash changeover on 1 January 2002 completed the process setting up EMU.

Economic situation
The position of the economy in the economic cycle, which is characterised by phases of expansion and recession in activity, varying in duration and intensity.

Electronic money (e-money)
An electronic store of monetary value on a technical device that may be widely used as a prepaid bearer instrument for making payments to undertakings other than the issuer, without necessarily involving bank accounts in the transactions.

EONIA (Euro overnight index average)
A measure of the effective interest rate prevailing in the euro interbank overnight market. It is calculated as a weighted average of the interest rates on unsecured overnight lending transactions denominated in euro, as reported by a panel of contributing banks.

Equity market
The market in which claims to a share in the ownership of a business are issued and traded. A major difference between equity and debt is that the former does not have to be repaid by the issuer.

ERM II (exchange rate mechanism II)
The exchange rate arrangement which provides the framework for exchange rate policy cooperation between the euro area countries and the EU Member States not participating in Stage Three of EMU.

Euribor (Euro Denominated Interbank Offered Rate)
The rate at which a prime bank is willing to lend funds in euro to another prime bank. The EURIBOR is calculated daily for interbank deposits with a maturity of one week and one to 12 months as the average of the daily offer rates of a representative panel of prime banks, rounded to three decimal places.

Euro
The name of the European single currency adopted by the European Council at its meeting in Madrid on 15 and 16 December 1995.

Euro area
The area encompassing those Member States in which the euro has been adopted as the single currency in accordance with the Maastricht Treaty and in which a single monetary policy is conducted under the responsibility of the Governing Council of the ECB. In 2014 the euro area comprises Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

Euroclear
A securities depository undertaking responsible for exchanging and completing transactions concerning international securities and cross-border transactions concerning national securities.

Eurogroup
Informal grouping bringing together those members of the ECOFIN Council who represent the euro area countries. It meets on a regular basis (usually prior to meetings of the ECOFIN Council) to discuss issues connected with the euro area countries’ shared responsibilities for the single currency. The European Commission and, when appropriate, the ECB are invited to take part in these meetings.

European Central Bank (ECB)
The ECB lies at the centre of the European System of Central Banks (ESCB) and the Eurosystem and has legal personality under Community law. It ensures that the tasks conferred upon the Eurosystem and the ESCB are implemented either through its own activities or through those of the national central banks, pursuant to the Statute of the European System of Central Banks and of the European Central Bank. The ECB is governed by the Governing Council and the Executive Board, and, as a third decision-making body, by the General Council.

European Commission
The institution of the European Community which ensures the application of the provisions of the Maastricht Treaty. The Commission develops Community policies, proposes Community legislation and exercises powers in specific areas. In the area of economic policy, the Commission recommends broad economic policy guidelines (BEPGs) and reports to the Council on economic developments and policies. It monitors public finances within the framework of multilateral surveillance and submits reports to the Council.

European Council
Provides the European Union with the necessary impetus for its development and defines the general political guidelines thereof. It brings together the Heads of State or Government of the Member States and the President of the European Commission.

European Currency Snake
On 24 April 1972, Belgium, France, Germany, Italy, Luxembourg and the Netherlands decided that, in future, the exchange rates of their currencies must not diverge from one another by more than 2.25%. This system was known as the “snake”.

European Monetary Institute
A temporary institution set up at the start of stage II of Economic and Monetary Union on 1 January 1994. The EMI was dissolved in 1998 when the European Central Bank (ECB) was established.

European Monetary System
The countries of the European Community formed the European Monetary System (EMS) between March 1979 and January 1999. The EMS exchange rate mechanism was based on a system of agreed central exchange rates between the member currencies. In accordance with the Maastricht Treaty, the EMS was converted to Economic and Monetary Union (EMU) in 1999.

European System of Central Banks (ESCB)
Composed of the European Central Bank (ECB) and the national central banks (NCBs) of all 27 Member States, i.e. it includes, in addition to the members of the Eurosystem, the NCBs of those Member States that have not yet adopted the euro. The ESCB is governed by the Governing Council and the Executive Board of the ECB, and, as a third decision-making body of the ECB, by the General Council.

Eurosystem
Comprises the ECB and the national central banks (NCBs) of those Member States that have adopted the euro in Stage Three of Economic and Monetary Union (see also euro area). The Eurosystem is governed by the Governing Council and the Executive Board of the ECB.

Executive Board (ECB)
One of the decision-making bodies of the ECB. It comprises the President and the Vice-President of the ECB and four other members appointed by common accord by the Heads of State or Government of the countries that have adopted the euro.

EXSECO
Dispatching service for physical securities and coupons on behalf of financial intermediaries, whereby the NBB acts as the coordinator and the mailing address.

Extensible Business Reporting Language (XBRL)
XBRL is a rapidly emerging computer language for the electronic exchange and standardisation of financial reporting through the internet. The non-profit-making organisation XBRL Belgium has been set up to encourage its use in Belgium.