• M1

    Narrow monetary aggregate. Comprises currency in circulation plus overnight deposits held with MFIs and central government (e.g. at the post office or treasury).

  • M2

    Intermediate monetary aggregate. Comprises M1 and deposits redeemable at a period of notice of up to and including three months (i.e. short-term savings deposits) and deposits with an agreed maturity of up to and including two years (i.e. short-term time deposits) held with MFIs and central government.

  • M3

    Broad monetary aggregate. Comprises M2 and marketable instruments, i.e. repurchase agreements, money market fund shares and units and debt securities with a maturity of up to and including two years issued by MFIs.

  • Maastricht Treaty

    The Maastricht Treaty, officially known as the Treaty on European Union, laid the foundations for a single European currency and for the European Union as we know it today. The Treaty was signed by 12 countries in Maastricht on 7 February 1992 and came into force on 1 November 1993. It was the culmination of several decades of debate on closer economic cooperation in Europe. It lays down a three-stage process for the establishment of the Economic and Monetary Union. The third stage, which comprises the introduction of the single currency, began on 1 January 1999. In addition, the Treaty sets out the rules or convergence criteria to be met by countries wishing to join the euro area.

  • Main refinancing operation

    A weekly open market operation conducted by the Eurosystem.

  • Marginal interest rate

    Interest rate at which the total credit to be allotted in a tender is achieved and below which bids are rejected.

  • Marginal lending facility

    A standing facility of the Eurosystem which counterparties may use to receive credit from a national central bank at a pre-specified interest rate against eligible assets.

  • Minimum bid rate

    The lower limit to the interest rates at which counterparties may submit bids in the variable rate tenders of the main refinancing operations. This is one of the key ECB interest rates reflecting the stance of monetary policy.

  • Minimum reserves

    Interest-bearing overnight deposits which credit institutions in the euro area must hold with the Eurosystem. The average deposits held by any given institution during each one-month period must total 2 p.c. of certain liabilities of that institution.

  • Monetary analysis

    One pillar of the ECB’s framework for conducting its comprehensive analysis of the risks to price stability, which forms the basis for the Governing Council’s monetary policy decisions. 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: economic analysis.

  • Money market

    Market where credit institutions engage in mutual short-term lending (generally up to one year) in order to adjust their deposits with the Eurosystem. The euro area money market is a single market: any difference in interest rates between countries would give rise to arbitrage.

  • Money on accounts

    Money in intangible form, as credit entries on demand accounts held with banks, postal accounts or public Treasury accounts.

  • Money supply

    Strictly speaking, all assets which serve as means of payment, such as notes and coins (fiduciary money) and sight deposits (money recorded on accounts). In the broad sense it also includes assets which can be converted into means of payment fairly quickly and at low cost, such as savings deposits.

  • Mortgage

    A mortgage is a loan contracted by a natural person for private purposes and used to finance the purchase of real estate (either an existing building, a new construction or renovation of a property).