Univ.-Prof. Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.English-language economic definitions generated from approved international institutional sources.
POS cash-back is a retail payment feature that lets a shopper obtain physical currency during checkout. The payment instrument is charged for both the merchandise and the requested cash, which the retailer dispenses at the terminal. This meaning is separate from promotional cash-back, where a later rebate reduces the customer's effective purchase cost.
The capital account tracks cross-border changes arising from one-time transfers that affect wealth, such as debt forgiveness or investment grants, together with purchases and sales of non-produced assets like natural-resource rights, licenses, and patents. It excludes routine trade and ordinary financial investment flows.
A central bank is the official monetary authority for a country or group of countries. It typically sets key interest rates, manages the currency and money supply, and may act to preserve financial stability. Its powers, objectives, and area of operation are determined by the laws governing the jurisdiction it serves.
A central bank credit facility is a liquidity arrangement that allows approved financial institutions to borrow from the central bank when needed. The institution may draw funds against eligible assets or other agreed security, using mechanisms specified by the central bank. These arrangements help provide short-term funding and support the implementation of monetary policy.
Under CRD IV, banks must maintain a capital conservation buffer consisting of Common Equity Tier 1 capital. Set at as much as 2.5% of risk-weighted exposures, this reserve is built up in ordinary times so that institutions have additional capacity to absorb losses during financial downturns.
Central bank independence refers to the autonomy granted to a monetary authority in making decisions within its statutory mandate. Its purpose is to shield monetary policy from temporary electoral or governmental interests while preserving accountability under the law. In the euro area, this safeguard is set out in Article 130 of the Treaty on the… read more »
CRR/CRD IV is the EU banking rulebook that sets the framework for how banks and certain investment firms are authorised, supervised, and required to manage financial risk. It combines directly applicable capital and risk rules with national legislation governing supervisory responsibilities and market access. The framework reflects the Basel III reforms and is designed to… read more »
Central bank money is the payment instrument created by a monetary authority and accepted as final settlement within the financial system. It includes cash in circulation and reserve balances that eligible financial institutions hold in accounts at the central bank. Unlike deposits issued by commercial banks, these instruments represent direct claims on the central bank… read more »
A bilateral net settlement system determines what each participating institution owes or is owed by another institution after offsetting their transactions over a specified period. Only the residual amount between the two institutions is then transferred, rather than the gross value of all underlying payments. Net obligations are determined independently for each pair of participants,… read more »
Bilateral netting is a contract-based process in which reciprocal payment duties between the same two participants are consolidated into a single balance. The participant with the larger total obligation pays the difference, while equal obligations cancel out. It may cover transactions under one or more agreements and is subject to applicable law.