Concepts
Rules, products and terms of European finance in plain words. 525 concepts, 50 with a full explanation.
0–9
A
- ACCA
- Acceptance criteria
- Account information service (AIS)
- Account reconciliation (balance sheet reconciliation)
- Accrual
- Accrual accounting
- Accrued interest
- Active account requirement (EMIR 3)
- Additional Tier 1 (AT1)
- Adverse media screening
- AgileFull explanation
- AI Act (Artificial Intelligence Act)Full explanation
- AI hallucination
- AIFMD (Alternative Investment Fund Managers Directive)
- Allocation
- ALMM (Additional liquidity monitoring metrics)
- AMLA (Anti-Money Laundering Authority)
- AMLR (Anti-Money Laundering Regulation)
- Amortised cost
- AnaCredit (Analytical Credit Datasets)
- Anti-dilution levy
- API (application programming interface)
- Appropriateness assessment
- Asset and liability management (ALM)
- Asset encumbrance
- Asset servicing
- Audit opinion
- Authorised participant (AP)
- Authorised push payment (APP) fraud
- Automated clearing house (ACH)
B
- Backtesting
- Bacs
- Bail-in
- Bank guarantee (demand guarantee)
- Basel III
- Batch processing
- BCBS 239 (risk data aggregation)
- Behavioural modelling
- Benefits realisation
- Best execution
- BIC (Business Identifier Code)
- Bill of lading
- Bond
- Break (reconciliation break)
- Budget
- Business caseFull explanation
- Business intelligence (BI)
C
- camt.052 (intraday account report)
- camt.053 (bank to customer statement)
- camt.054 (debit and credit notification)
- Capital buffers
- Capital call
- Card authorisation, clearing and settlement
- Cash forecasting
- Cash penalty (CSDR)
- Cash pooling
- CASP (Crypto-Asset Service Provider)
- CBPR+ (Cross-Border Payments and Reporting Plus)
- CCP (Central counterparty)Full explanation
- CDD (Customer Due Diligence)Full explanation
- CET1 (Common Equity Tier 1)Full explanation
- CFA (Chartered Financial Analyst)
- Change impact assessment
- Change request
- CHAPS
- Charge bearer codes (OUR, SHA, BEN)
- ChargebackFull explanation
- Chart of accounts (CoA)
- CIA (Certified Internal Auditor)
- Clearing member
- Clearing obligation
- Climate transition plan
- Climate-related financial risk
- Close-out netting
- Cloud migration
- Collateral management
- Collateral valuation
- Combined ratio
- Conflicts of interest (MiFID II)
- Consolidation (group accounts)
- Consumer Duty (UK)
- Contingency funding plan (CFP)
- Contractual service margin (CSM)
- Control testing (design and operating effectiveness)
- Convexity
- Core banking system
- COREP (Common Reporting)Full explanation
- Corporate actionFull explanation
- Correspondent bankingFull explanation
- Cost allocation
- Cost-income ratio
- Cover payment
- CRD6
- Credit concentration risk
- Credit limit
- Critical data element (CDE)
- Critical ICT third-party provider (CTPP)
- Critical path
- Cross-border Payments Regulation
- CRR (Capital Requirements Regulation)
- CRR3
- CRS (Common Reporting Standard)
- CSA (Credit support annex)
- CSD (Central securities depository)Full explanation
- CSDR (Central Securities Depositories Regulation)
- CSDR settlement discipline
- CSRD (Corporate Sustainability Reporting Directive)Full explanation
- Current and future state
- CustodianFull explanation
- Customer risk rating
- Cut-off time
- Cutover
D
- DAC6 (mandatory disclosure of cross-border arrangements)
- DAC8 (crypto-asset tax reporting)
- Data catalogue
- Data dictionary
- Data governance
- Data lake
- Data lakehouse
- Data lineageFull explanation
- Data mesh
- Data migration
- Data owner
- Data product
- Data quality dimension
- Data quality rule
- Data retention
- Data steward
- Data warehouse
- Dealing cut-off
- Default fund
- Defect management
- Deferred net settlement (DNS)
- Deferred tax
- Definition of default
- Delegated act
- Dematerialisation
- Dependency management
- Depositary (funds)
- DevOps
- Digital euro
- Direct debit mandate
- Discriminatory power (Gini, AUC)
- Documentary collection
- Documentary discrepancy
- DORA (Digital Operational Resilience Act)Full explanation
- Double materiality
- Double tax treaty (DTT)
- Double-entry bookkeeping
- DPM (Data Point Model)
- Duration
- DV01 (Dollar value of one basis point)
- DVP (Delivery versus payment)Full explanation
- Dynamic currency conversion (DCC)
E
- Early warning indicators (credit)
- Earned value management (EVM)
- EBA taxonomy (reporting framework release)
- EBICS (Electronic Banking Internet Communication Standard)
- ECMS (Eurosystem Collateral Management System)
- EDD (Enhanced Due Diligence)
- Effective interest rate (EIR)
- Electronic money (e-money)
- ELTIF (European long-term investment fund)
- EMIR (European Market Infrastructure Regulation)
- EMIR reporting
- End-user computing (EUC)
- Equity
- ESA guidelines (comply or explain)
- ESRS (European Sustainability Reporting Standards)
- ETF (Exchange-traded fund)
- ETF creation and redemption
- ETL (extract, transform, load)Full explanation
- EU Blue Card
- EU taxonomy
- European Supervisory Authorities (ESAs)
- Eurosystem collateral framework
- EVE (economic value of equity)
- Ex-date
- Expected credit loss (ECL)Full explanation
- Explainability (AI)
- Export credit agency (ECA)
- Exposure at default (EAD)
- External audit (statutory audit)
F
- Fair value hierarchy (IFRS 13 levels)
- FASTER directive
- Faster Payments (FPS)
- FATCA (Foreign Account Tax Compliance Act)
- FATF (Financial Action Task Force)
- FINREP (Financial Reporting)
- Fit and proper assessment
- FIU (Financial Intelligence Unit)
- FMI (Financial market infrastructure)
- Forbearance
- Forecast (rolling forecast)
- Foreign currency translation (IAS 21)
- Forfaiting
- Four-party card scheme
- Free of payment (FOP)
- FRM (Financial Risk Manager)
- FTP (funds transfer pricing)
- Fund accounting
G
H
I
- IAS 32 Financial Instruments: Presentation
- IAS 37 Provisions, Contingent Liabilities and Contingent Assets
- IBAN (International Bank Account Number)
- IBNR (incurred but not reported claims)
- IBOR (Investment book of record)
- ICAAP (Internal Capital Adequacy Assessment Process)
- ICSD (International central securities depository)
- ICT third-party risk
- IFRS 15 Revenue from Contracts with Customers
- IFRS 16 Leases
- IFRS 17 Insurance Contracts
- IFRS 9 Financial InstrumentsFull explanation
- IFRS 9 staging
- ILAAP (Internal Liquidity Adequacy Assessment Process)
- Impact tolerance (UK operational resilience)
- Implementing act
- In-house bank
- Income collection
- Incoterms rules
- Inducements
- Initial margin (IM)
- Insider list
- Instant Payments Regulation (IPR)Full explanation
- Intended settlement date
- Interchange fee
- Intercompany netting
- Intercompany reconciliation
- Internal audit
- Intraday credit
- Intraday liquidityFull explanation
- IR delta (Interest rate delta)
- IR vega (Interest rate vega)
- IRB approach (internal ratings-based)
- IRRBB (Interest rate risk in the banking book)
- ISDA Master Agreement
- ISIN (International securities identification number)
- ISO 20022Full explanation
- ITS (Implementing Technical Standards)
J
K
L
- Large exposures
- Large language model (LLM)
- LCR (Liquidity Coverage Ratio)Full explanation
- Lean Six Sigma
- Legacy decommissioning
- Legal entity identifier (LEI)
- Letter of credit (documentary credit)Full explanation
- Level 1 and Level 2 legislation (Lamfalussy process)
- Leverage ratio
- Liquidity gap (maturity ladder)
- Liquidity management tools (LMTs)
- Loan-to-value ratio (LTV)
- Loss given default (LGD)
M
- Machine learning modelFull explanation
- Mainframe
- Major ICT-related incident reporting
- Managed service
- Management accounts (management reporting)
- Management company (ManCo)
- Mandatory buy-in
- Mandatory corporate action
- MAR (Market Abuse Regulation)Full explanation
- Margin call
- Master dataFull explanation
- Materiality (audit and reporting)
- Maximum distributable amount (MDA)
- Merchant acquiring
- Merchant service charge (MSC)
- Metadata
- MiCA (Markets in Crypto-Assets Regulation)
- MiFID II (Markets in Financial Instruments Directive II)Full explanation
- MiFIR (Markets in Financial Instruments Regulation)
- MiFIR transaction reporting
- Minimum viable product (MVP)
- MLRO (Money Laundering Reporting Officer)
- Model drift
- Model inventory
- Model risk
- Model validationFull explanation
- Money market fund (MMF)
- Month-end close (period-end close)Full explanation
- MREL
- MT 103 (single customer credit transfer)
- MT 940 (customer statement message)
- MT to MX migration
N
O
- Official Journal of the European Union (OJ)
- Offshoring
- Omnibus account
- Ongoing charges
- Open banking
- Operational loss event
- Operational risk
- Operational risk capital (business indicator approach)
- Ordinary legislative procedure
- ORSA (Own Risk and Solvency Assessment)
- OTC derivative (Over-the-counter derivative)
- Output floor
- Outsourcing (EBA Guidelines)
- Own funds (regulatory capital)
P
- pacs.002 (payment status report)
- pacs.004 (payment return)
- pacs.008 (FI to FI customer credit transfer)
- pacs.009 (financial institution credit transfer)
- pain.001 (customer credit transfer initiation)
- pain.008 (customer direct debit initiation)
- Partial settlement
- Pay Transparency Directive
- Payment facilitator (PayFac)
- Payment factory
- Payment gateway
- Payment initiation service (PIS)
- Payment institution
- Payment recall
- Payment repair
- Payment throughput
- Payment versus payment (PvP)
- PCI DSS (Payment Card Industry Data Security Standard)
- PEP (Politically Exposed Person)
- Periodic KYC review
- Permanent establishment (PE)
- PFMI (Principles for financial market infrastructures)
- Pillar 1 (minimum capital requirements)
- Pillar 2 (P2R and P2G)
- Pillar 3 disclosures
- Pillar Two (global minimum tax)
- PMO (project management office)
- PMP (Project Management Professional)
- Portfolio compression
- Portfolio reconciliation (EMIR)
- PRIIPs KID (Key information document)
- PRINCE2
- Principal adverse impacts (PAI)
- Probability of default (PD)Full explanation
- Probation period
- Process mapping
- Product backlog
- Product governance
- Programme and project
- Proxy voting
- PSD2 (Second Payment Services Directive)Full explanation
- PSD3 and the Payment Services Regulation (PSR)
- Python for finance
Q
R
- R-transactions
- RACI matrix
- RAG status
- RAID logFull explanation
- RAROC (risk-adjusted return on capital)
- Rating model (internal credit rating)
- RCSA (risk and control self-assessment)Full explanation
- Real-time gross settlement (RTGS)
- Real-time processing
- ReconciliationFull explanation
- Record date
- Recovery plan
- Reference data
- Register of information (DORA)
- Regression testing
- Rehypothecation (collateral reuse)
- Reinsurance
- Remittance information
- Repo (Repurchase agreement)Full explanation
- Requirements
- Resolution planning
- Retrieval-augmented generation (RAG)
- Reverse repo
- Risk appetite (risk appetite framework)
- Risk-based approach (AML)
- Risk-weighted assets (RWA)
- Robotic process automation (RPA)
- Rolling reserve
- Root cause analysis
- RTS (Regulatory Technical Standards)
S
- Safeguarding of client funds
- Safekeeping
- Sanctions screeningFull explanation
- SAR (Suspicious Activity Report)
- Scenario analysis (operational risk)
- Scheme fee
- Scope creep
- Scrum
- Securities lending
- Securitisation
- Security master
- Segregation of duties (SoD)
- SEPA (Single Euro Payments Area)
- SEPA Credit Transfer (SCT)Full explanation
- SEPA Direct Debit (SDD Core and B2B)
- SEPA Instant Credit Transfer (SCT Inst)Full explanation
- SEPA Payment Account Access (SPAA)
- SEPA Regulation
- SEPA Request-to-Pay (SRTP)
- Service level agreement (SLA)
- Settlement failFull explanation
- Settlement finality
- Settlement internaliser
- Settlement matching
- SFDR (Sustainable Finance Disclosure Regulation)
- SFTR (Securities Financing Transactions Regulation)
- Share class
- Share class hedging
- Shared service centre (SSC)
- SIC (Swiss Interbank Clearing)
- Significant increase in credit risk (SICR)
- Single rulebook
- Single Supervisory Mechanism (SSM)
- SM&CR (Senior Managers and Certification Regime)
- Software as a service (SaaS)
- Solvency Capital Requirement (SCR)
- Solvency IIFull explanation
- SOX controls (ICFR)
- SPPI test (solely payments of principal and interest)
- SQL (Structured Query Language)
- SRD II (Shareholder Rights Directive II)
- SREP (Supervisory Review and Evaluation Process)
- Stakeholder map
- Standard settlement instructions (SSI)
- Standardised approach for credit risk
- Standby letter of credit (SBLC)
- Statement of work (SOW)
- Statutory accounts (annual financial statements)
- Steering committee
- STOR (Suspicious Transaction and Order Report)
- Straight-through processing (STP)
- Stress test (supervisory)
- Strong customer authentication (SCA)
- Structured postal address
- STS securitisation (simple, transparent and standardised)
- Sub-custodian
- Sub-ledger
- Suitability assessment
- Supply chain finance (reverse factoring)
- Swift (network)
- Swift gpi (global payments innovation)
- Swing pricing
- Synthetic securitisation
- System integration testing (SIT)
T
- T+1 (Settlement cycle)Full explanation
- T2 (TARGET RTGS and central liquidity management)Full explanation
- T2S (TARGET2-Securities)
- Target operating model (TOM)Full explanation
- Technical debt
- Technical provisions
- Three lines model (three lines of defence)Full explanation
- Three lines of defence
- Tier 2 capital
- TIPS (TARGET Instant Payment Settlement)
- TLAC (Total Loss-Absorbing Capacity)
- TLPT (Threat-Led Penetration Testing)
- Trade confirmation
- Trade lifecycle
- Trade repository
- Transaction monitoringFull explanation
- Transfer agent
- Transfer pricing
- Transposition
- Travel rule
- Treasury management system (TMS)
- Tri-party collateral
- Trial balance
- Trilogue
U
- UBO (Ultimate Beneficial Owner)
- UCITS (Undertakings for collective investment in transferable securities)
- UCP 600 (Uniform Customs and Practice for Documentary Credits)
- UETR (Unique end-to-end transaction reference)
- UPI (Unique product identifier)
- URDG 758 (Uniform Rules for Demand Guarantees)
- User acceptance testing (UAT)Full explanation
- User story
- UTI (Unique transaction identifier)