Univ.-Prof. Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.English-language economic definitions generated from approved international institutional sources.
Chaining is a settlement arrangement in which the completion of one instruction helps make the assets or credit needed for another instruction available. By linking mutually dependent transactions, a payment or securities system may settle a larger set of queued instructions than would be possible if each instruction had to rely solely on resources already… read more »
Clearing is the process of reconciling and determining the amounts that participants in a financial transaction must deliver or receive before those amounts are finally paid or transferred. It may involve aggregating transactions, offsetting reciprocal claims, and using an intermediary or other organised arrangement. Settlement is the later stage in which the resulting cash or… read more »
Cash placement refers to loading an electronic-payment account with banknotes or coins through a process started by the account holder. It increases the balance available for later electronic transactions and does not describe those transactions themselves.
A cash settlement agent is the bank or other institution through which the monetary side of a payment or securities transaction is completed. It settles amounts owed between system participants, often by making or receiving the relevant account entries, while a separate party may handle trade matching, clearing, custody, or transaction records. Banks and central… 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 »
A BIC is an alphanumeric identifier assigned to a bank or other financial institution for use in payment and messaging activities. SWIFT administers the BIC registration system. Each identifier has an eight-character core, while three additional characters may be appended to identify a particular branch or organisational unit. The core identifies the institution, its country,… read more »
A cap is a rule that restricts how large a participant’s permitted activity or outstanding position may become in a payment or settlement arrangement. It may govern exposure in either direction, including amounts owed to or receivable from the system, and is determined under the arrangement’s governance and measurement methods.
Batch processing refers to submitting multiple payment or securities-transfer instructions as one operational set, allowing the relevant system to manage them under a common processing arrangement rather than individually.