Glossary

Euro Area

The area encompassing those Member States in which the Euro has been adopted as the single currency in accordance with the Treaty and in which a single monetary policy is conducted under the responsibility of the relevant decision-making bodies of the ECB.

The euro area comprises Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Slovenia, Cyprus and Malta.

European Economic Area (EEA):

Existing EU States plus Iceland, Liechtenstein, and Norway.

European Union (EU):

Euro Area plus Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Sweden and the United Kingdom.

Eurosystem

Comprises the ECB and the national central banks of the Member States which have adopted the Euro in Stage Three of EMU (see also euro area). There are currently 13 national central banks in the Eurosystem.

Legacy currencies:

Belgium - Belgian Franc; France - French Franc; Germany - Deutschemark;
Ireland - Irish Pound; Greece - Drachma; Italy - Italian Lira; Spain - Peseta;
Luxembourg - Franc (Belgian); Austria - Austrian Schillings; Portugal - Escudo.

NCB

National Central Bank - Central bank of an EU Member State which has adopted the single currency in accordance with the Treaty.

NTMA

National Treasury Management Agency, the state debt management agency issues bonds and manages the government debt.

Promissory Note

Completed by Central Bank on receipt of authorisation by counterparty - collateral based on mortgage pool held by counterparty.

Rating

The rating assigned to the debt instrument, institution, or guarantor by one of the three ratings agencies. The ratings are qualitative indicators of credit risk, i.e.,the ability of issuers (or guarantors) to repay their borrowings. The exact definition differs slightly across rating agencies but a harmonised scale exists for internal Eurosystem use.

Tier 1

Amongst other eligibility criteria these assets must be debt instruments, must meet high credit standards and be located in the Euro area. To be tier one eligible an asset must meet all the eligibility criteria.