Financial instrument

At the ECB, any contractual arrangement relating to payments involving monetary financial institutions. – Pursuant to Section 2 (3) of the German Banking Act, a contract that gives rise to a financial asset (such as cash, an equity instrument of another party, derivatives with a positive fair value, a right to payment arising, for example, from the delivery of goods or services) for one of the parties involved and a financial liability (such as a
obligation to pay cash, derivatives with negative fair value) flows. – In the context of financial reporting as defined in IAS 39, all contracts that give rise to – a financial asset, – a financial liability, or – an equity instrument. – Defined in German legal terminology in accordance with Section 1, Paragraph 11 of the German Banking Act (KWG) as securities, money market instruments, foreign exchange or units of account, and derivatives. – Securities are, even if no certificates have been issued in respect of them – shares, – share certificates, – bonds, – participation certificates, – warrants and – other securities comparable to shares or bonds if they can be traded on a market. Securities also include shares in investment funds issued by a capital management company or a foreign fund company. – Money market instruments are receivables that are not included in this list and are normally traded on the money market. – Derivatives are forward transactions structured as fixed transactions or options whose price depends directly or indirectly on – the stock exchange or market price of securities, – the stock exchange or market price of money market instruments, – the price of foreign currencies or units of account, – interest rates or other yields, or – the stock exchange or market price of commodities or precious metals. – See derivatives transactions clearing obligation, derivatives transactions reporting obligation, financial derivatives, financial instrument, financial system, financial products, structured, information sheets for financial instruments, financial market product registration, redemption vehicle. – Cf. Deutsche Bundesbank Monthly Report of July 2004, pp. 39 ff. (market regulation in the euro area), Deutsche Bundesbank Monthly Report of December 2006, pp. 76 f. (introduction of the term from the Capital Adequacy Directive into the KWG), BaFin Annual Report 2006, p. 113 (bifurcation of the term “financial instrument” by insertion of section 1a of the KWG), BaFin Annual Report 2009, pp. 53 f. (disclosure requirements), BaFin’s 2011 Annual Report, p. 88 (revision of accounting regulations; overview), and the respective BaFin Annual Report, chapter “International,” ECB Monthly Report of November 2011, pp. 81 ff. (detailed presentation of funding instruments for banks).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/