Note: Terms defined elsewhere in the Glossary
are shown in italics.
BDI: The Federation of
BSC: Banking Supervision
Committee, a committee of the ESCB that provides structural and
CEPR: Centre for Economic
CEPS: Centre for European
CER: Centre for European
CFS: Center for Financial
ECB: European Central
Ecofin: The Council of
Ministers of the EU responsible for Economic and Financial Affairs;
it is made up of the economics and finance ministers of the Member
EFC: Economic and Financial
Committee. In accordance with Article 114(2) of the EC Treaty,
an Economic and Financial Committee was set up at the start of
the Stage Three of EMU. For further information on the EFC, see
the Council Decision of 21 December 1998 on the detailed provisions
concerning the composition of the Economic and Financial Committee
(98/743/EC), together with the Council Decision of 31 December
1998 adopting the Statutes of the Economic and Financial Committee
EMAC: The Committee on
Economic and Monetary Affairs of the European Parliament
EMU: Economic and Monetary
ESCB: The European System
of Central Banks, which consists of the ECB and the national central
banks of all the Member States of the EU.
EU: European Union
Euro area: Term used to
refer collectively to those Member States which are participating
in Stage Three of EMU, that is, who have adopted the euro. Currently,
twelve of the fifteen Member States have adopted the euro: Belgium,
Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland.
Eurogroup: The group of
government finance ministers of the Member States in the euro
area; they meet every time there is a meeting of Ecofin.
European Council: The
European Council consists of the heads of state or government
of the EU.
Eurostat: The Statistical
Office of the European Communities, which is based in Luxembourg.
Eurosystem: The central
banking system of the euro area, which is constituted of the ECB
and the national central banks of the Member States that have
adopted the euro.
Eurozone: See euro area
Federal Reserve System:
The central banking system of the United States of America. Established
in 1913, it began to operate in November 1914. Its setup, although
somewhat altered since its establishment, particularly by the
Banking Act of 1935, has remained substantially the same.
FOMC: The Federal Open
Market Committee is the most important monetary policymaking body
of the Federal Reserve System.
GDP: Gross Domestic Product
HICP: Harmonised Index
of Consumer Prices developed, compiled and disseminated by Eurostat
in close co-operation with the national statistical institutes.
Conference - the negotiations that are held between the governments
of the Member States with a view to amending the Treaties.
IMF: International Monetary
M3: In December 1998 the
ECB announced that "M3 will consist of currency in circulation
plus certain liabilities of Monetary Financial Institutions (MFIs)
resident in the euro area and, in the case of deposits, the liabilities
of some institutions that are part of central government (such
as Post Offices and Treasuries). These liabilities included in
M3 are: overnight deposits; deposits with an agreed maturity of
up to two years; deposits redeemable at notice up to three months;
repos; debt securities with maturity of up to two years; unit/shares
of money market funds and money market paper (net)." (See
also monetary aggregates.)
Monetary aggregates: a
monetary aggregate can be defined as the sum of currency in circulation
plus outstanding amounts of certain liabilities of financial institutions
that have a high degree of "moneyness" (or liquidity
in a broad sense). The narrow monetary aggregate M1 has been defined
by the Eurosystem as currency in circulation plus euro area residents'
(other than central government) holdings of overnight deposits
with euro area money-issuing institutions. The monetary aggregate
M2 comprises M1 plus deposits with an agreed maturity of up to
two years and deposits redeemable at notice of up to three months.
The broad monetary aggregate M3 includes M2 plus repurchase agreements,
money market fund shares/units and money market paper and debt
securities with a maturity of up to two years. The Governing Council
has announced a reference value for the growth of M3.
MPC: Monetary Policy Committee
of the Bank of England, which sets interest rates for the UK.
NCB: National central
bank of one of the Member States of the EU.
Policy mix: The overall
stance of fiscal and monetary policy. The policy-mix may consist
of various combinations of expansionary and restrictive policies,
with a given fiscal stance being either supported or offset by
SGP: Stability and Growth
TEC: Treaty establishing
the European Community
UNICE: Union of Industrial
and Employers' Confederation of Europe