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Oesterreichische Nationalbank - Dictionary Category: Economy and Finance Date & country: 04/10/2008, AU Words: 3913

institutional framework
Institutions have been defined in a variety of ways. According to Douglas North`s widely cited definition, the term `institution framework” refers to the set of informal and formal `rules of the game” that constrain political, economic and social interactions (North, 1990, 1991)....

instrike
The trigger or barrier price at which an in option-such as an up-and-in put or a down-and-in call-becomes a conventional option. See Down-and-In Call (diagram)....

instrumental variable
In statistics, an instrumental variable (IV, or instrument) can be used in regression analysis to produce a consistent estimator when the explanatory variables (covariates) are correlated with the error terms. This can be caused by endogeneity, by omitted covariates, or by measurement errors in the covariates. In this situation, ordinary linear reg...

Insurance Committee
Regulatory and legislative policy body....

insurance securitization
`Insurance securitization` can be defined as the transferring of underwriting risks to the capital markets through the creation and issuance of financial securities. In particular, the insurance securitization process involves the following two elements: The transformation of underwriting cash flows into tradable financial securities; The transfer ...

insurance technical reserves
5.98 The category insurance technical reserves (F.6) consists of all transactions in insurance technical reserves (AF.6) that is the technical provisions of insurance corporations and (autonomous and non-autonomous) pension funds against policy holders or beneficiaries as laid down in Council Directive 91/674/EEC of 19 December 1991 on the annual a...

intangible fixed assets
capital assets with no physical existence; value is limited by the rights and anticipative benefits that possession confers upon the owner....

Integrated Guidelines
Integrated Guidelines 2005-2008 including a Commission Recommendation on the Broad Economic Policy Guidelines. The Integrated Guidelines, which the European Commission adopted on 12 April 2005, lay out a comprehensive strategy of macroeconomic, microeconomic and employment policies to redress Europe`s weak growth performance and insufficient job cr...

integration subsidy
Employment/training combination - specific form of integration subsidy (gemeinnützige Eingliederungsbeihilfe). This subsidy is currently supporting projects which combine employment with vocational and continuing training, in order to improve participants` prospects of reintegration....

integrity
Security protection aimed at ensuring that data cannot be deleted, changed or otherwise tampered without detection....

integrity
the quality of being protected against accidental or fraudulent alteration or of indicating whether or not alteration has occurred....

intellectual capital
Intellectual capital comprises relationships with customers and partners, innovation efforts, company infrastructure and the knowledge skills of organizational members....

intellectual property
`Intellectual Property` means all intellectual property and all rights relating thereto in any part of the world including without limiting the generality of the foregoing, trade secrets, know-how, information, data, discoveries, specifications, diagrams, expertise, techniques, technology, patent applications, patents, copyrights (including but not...

interbank funds transfer system
a funds transfer system in which most (or all) participants are credit institutions....

interbank payments
payments, generally of very large amounts, which are mainly exchanged between banks or between participants in the financial markets and usually require urgent and timely settlement....

intercept
The intercept is the point at which a line crosses an axis. The Y intercept is the value of Y at which the line crosses the Y axis. It is therefore the value of Y when X = 0....

interchange fee
transaction fee set by the network organisation and paid by the card issuing institution to the acquiring institution for the cost of deploying and maintaining ATMs and EFTPOS terminals....

interest arbitrage
Transactions between financial centres in foreign currencies that take advantage of differentials in interest rates between the two centres and the difference between the forward and spot exchange rates. In some circumstances it is possible to make a profit by buying a foreign currency, changing it into the currency of the home market, lending it f...

interest capitalization
Interest capitalization is the addition of unpaid interest to the principal balance of your unsubsidized loan. When interest is capitalized your total debt and monthly payments increase....

interest expense
Interest expense = The amount reported by a company or individual as an expense for borrowed money. In the U.K., it is called `interest payable`. Interest is calculated as a percentage of the amount of your debt for each period of time. Points paid for a mortgage are a form of prepaid interest....

interest rate channel
one channel (macroeconomic) by which monetary policy impulses may be transmitted; ultimately affects output (Y)....

interest rate contract
Interest rate contracts are contracts related to an interest-bearing financial instrument or whose cash flows are determined by referencing interest rates or another interest rate contract (e.g., an option on a futures contract to purchase a Treasury bill). These contracts are generally used to adjust the bank`s interest rate exposure or, if the ba...

interest rate convergence
The nominal long term interest rate of government bonds (observed over the last twelve months) should not exceed that of the three EU member countries with the lowest inflation rates by more than 2 percentage points. (one of the Maastricht criteria)....

interest rate future
futures contract with an interest bearing instrument as underlying asset....

interest rate policy
Refers to central banks` setting of interest rates and to commercial banks` setting of lending and deposit rates....

interest rate spread
The interest rate spread is a simple and powerful tool for forecasting recessions and has recently been added as a component of the Conference Board`s Index of Leading Economic Indicators. The interest rate spread used by the Conference Board is found by subtracting the Fed funds rate (the rate that banks charge one another for overnight loans) fro...

interest rate swap
An interest rate swap involves an exchange of interest payments of different character (e.g., fixed rate and floating rate, two different floating rates, fixed rate in one currency and floating rate in another, etc.). BPM5-94...

interest rate swap
An interest rate swap is a contractual agreement entered into between two counterparties under which each agrees to make periodic payment to the other for an agreed period of time based upon a notional amount of principal. The principal amount is notional because there is no need to exchange actual amounts of principal in a single currency transact...

interest rate swap
Generically, a fixed rate for floating rate swap in a single currency, but including any swap with payments on both sides determined by interest rate levels. Also called Swap de Taux D`Intérêt. ifciGL...

interest rate swap
Interest rate swaps are simple financial contractual agreements between two counterparties. In a `plain vanilla” fixed/floating interest rate swap, two ounterparties exchange their interest payments on the `notional principal” for a specified length of time. The first party that pays the fixed amount of interest and receives a floating amount o...

interest rate swap
Swap where the cash flows exchanged are based on two different ways of calculating interest, most commonly where one is a fixed rate and the other a floating rate priced off Libor....

interim financing
Short-term financing used by sellers to bridge the gap between the sale of one house and the purchase of another (also known as bridge or swing loans). A construction loan is also a form of interim financing....

interlinking
`interlinking` shall mean the technical infrastructures, design features and procedures which are put in place within, or constitute adaptations of, each national RTGS system and the ECB payment mechanism for the purpose of processing cross-border payments within Target...

Interlinking Internal Reference
A bilateral mechanism unique messages` referencing system within the Interlinking system....

interlinking mechanism
One of the components of the TARGET system. The term is used to designate the infrastructures and the procedures which link domestic RTGS systems in order to process cross-border payments within TARGET....

Interlinking processing component
Component responsible for implementing validation and other interlinking processes and communicate with the domestic RTGS processing component....

Interlinking system
Infrastructure and procedures which are used within each RTGS system or in addition to the RTGS systems to process cross-border payments within TARGET....

intermediate consumption
Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services maybe either transformed or used up by the production process. ESA95-P.2/3.69...

intermediate goods
Goods that have undergone some manufacturing or processing, but have not yet reached the stage of becoming final goods. Thus steel and cotton yarn are intermediate goods....

intermediate inputs
Goods and services, other than fixed assets, used as inputs into the production process of an establishment that are produced elsewhere in the economy or are imported. They may be either transformed or used up by the production process. Land, labour, and capital are primary inputs and are not included among intermediate inputs....

internal auditing
Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. The objective of internal auditing is to assist members of the organization in the effective discharge of their responsibilities. To this end, internal auditing furnishes them with analys...

Internal Auditors Committee
An ESCB committee...

International Court of Justice
The International Court of Justice is the principal judicial organ of the United Nations. Its seat is at the Peace Palace in The Hague (Netherlands). It began work in 1946, when it replaced the Permanent Court of International Justice which had functioned in the Peace Palace since 1922. It operates under a Statute largely similar to that of its pre...

international investment position
(i.i.p.) (or external asset or liability position): the value and composition of the stock of an economy`s financial claims on and financial liabilities to the rest of the world. At present, the euro area i.i.p. is compiled on a net basis, from aggregated national data....

international investment position
`international investment position` shall mean the annual balance sheet of the stock of cross-border financial assets and liabilities at a reference date. ECB/1998/17...

International Investment Position
Austria`s International Investment Position (IIP) is a statistical statement of its stock of external financial assets and liabilities. All items are end-of-year stocks, measured at market prices wherever possible. The IIP comprises direct investment equity capital (including reinvested earnings), claims on and liabilities to affiliated enterprises...

international investment position
the statistical statement of the value and composition of the stock of an economy`s financial assets or financial claims on the rest of the world, and of an economy`s financial liabilities to the rest of the world...

International Labour Organization
The ILO accomplishes its work through three main bodies, all of which encompass the unique feature of the Organization: its tripartite structure (government, employers, workers). 1. International Labour Conference: The member States of the ILO meet at the International Labour Conference in June of each year, in Geneva. 2. The Governing Body is the...

International Monetary Fund
The IMF is an international organization of 183 member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment....

International Monetary Fund
The purposes of the IMF are the following: to promote international monetary cooperation; to facilitate the expansion and balanced growth of international trade and contribute thereby to the promotion and maintenance of high levels of employment and real income; to promote exchange stability, maintain orderly exchange arrangements among member stat...

International Petroleum Exchange
London-based energy futures and options exchange....

International Relations Committee
An ESCB committee...

inter-NCB account
`inter-NCB accounts` shall mean the accounts that each NCB and the ECB shall open for each other on their respective books for the operation of cross-border Target payments; each such inter-NCB is held for the benefit of the ECB or the NCB in whose name the account is opened...

Internet
an open worldwide communication infrastructure consisting of interconnected computer networks and allowing access to remote information and the exchange of information between computers....

Internet presence
What Is An Internet Presence? Many feel they need to get their business/organisation `on the internet`. Often they aren`t sure exactly what this means, but think they should be doing it. Being `on the internet` is a bit vague and could mean many different things. We use the term `Internet Presence` to describe all or any of the possibilities, but ...

interoperability
a situation in which payment instruments belonging to a given scheme may be used in other countries and in systems installed by other schemes. Interoperability requires technical compatibility between systems, but can only take effect where commercial agreements have been concluded between the schemes concerned....

interpenetration
[n] mutual penetration; diffusion of each through the other ; [n] the action of penetrating between or among...

intertemporal budget constraints
budget constraint: the limitations on consumption of different goods imposed by the fact that households have only a limited amount of money to spend (their budget). The budget constraint defines the opportunity set of individuals, when the only constraint that they face is money....

intertemporal decision making
Many economic decisions are intertemporal in the sense that current decisions affect also the choices available in the future. Examples are saving and retirement decisions of households, and investment decisions of firms. In the case of saving, the saving decision made today affects not only the household`s current consumption but also his future c...

intervention currency
A currency that is commonly used by central banks for exchange market intervention. See reserve currency....

in-the-money option
An option having intrinsic value. A call option is in-the-money if its strike price is below the current price of the underlyingfutures contract. A put option is in-the-money if its strike price is above the current price of the underlying futures contract....

intraday finality
An important concept that is often used in connection with the timing of finality is intraday finality or an intraday final transfer capability. The Noël Report defined this concept as the ability to initiate - and to receive timely confirmation of - transfers between accounts at the central bank that become final within a brief period of time. The...

intraday liquidity
funds which can be accessed during the business day, usually to enable financial institutions to make payments in real time....

intra-group loans
Intra-group loans and advances Loans and advances to related parties that are resident entities, net of provisions. Excluded from this item are holdings of debt securities issued by related parties that are resident entities (included under `Investment securities” or `Trading securities”) and other accounts receivable (e.g. fees and commissions...

intraindustry trade
Intra-Industry Trade (IIT) refers to simultaneous exports and imports of commodities in the same industry or production group in a given time....

intranet
An intranet is a communications network built using the same system as the Internet and employing many of the same tools, particularly World Wide Web browsers. The difference is that the intranet is private and internal to a company. The word is new enough that its meaning has not yet quite settled down - some usages imply that an intranet can also...

Intrastat
Intrastat is an abbreviation of Intra EC Trade Statistics. The current Intrastat system came into existence at the beginning of 1993, at the same time as border controls between EU members were abolished....

Intrastat
Intrastat is the system for collecting statistics on the physical trade in goods (i.e. the actual movement of goods) between the Member States of the European Union (EC). It has been in operation since the beginning of the Single Market on 1 January 1993 and replaced customs declarations as the source of trade statistics within the EC. The requirem...

inverse floater
An inverse floater is a fixed income instrument whose coupon or interest rate is periodically reset according to a short-term rate index such as LIBOR or the prime rate. Unlike a traditional floating rate instrument, however, the inverse floater`s rate is set equal to a fixed rate minus the short-term rate index. Accordingly, the yield on an invers...

inverse floater
An inverse floater is an interest rate derivative which pays lower coupons when interest rates fall, and higher coupons when interest rates rise. Such a derivative is doubly sensitive to interest rate risk. As interest rates rise, even with fixed coupons, bond prices fall. An inverse floater falls even further since in addition to this standard eff...

investment coin
Precious metal coin of very high fineness, bought for investment purposes. See also bullion coin. http://junior.austrian-mint.at/ (12.9.2002)...

investment company
An investment company invests the pooled funds of investors in securities appropriate for its stated investment objectives. For a fee, the investment company provides more diversification, liquidity, and professional management service than is normally available to individual investors. Mutual funds, known as open-end investment companies, have por...

investment company
Firm that invests the pooled funds of retail investors for a fee. There are two types: open-end (mutual funds) and closed-end (investment trusts)....

investment firm
Investment firm shall mean any legal person the regular occupation or business of which is the provision of investment services for third parties on a professional basis. 93/22/EEC...

investment income
Investment income comprises dividends and interest received on investments. Interest and dividend income is recognised on a time-proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity....

investment income
Investment income incorporates income derived from a resident entity`s ownership of a foreign financial asset and, symmetrically, income derived from a non-resident entity`s ownership of a domestic financial asset....

investment income
Investment Income is gross income from investment property, including portfolio income such as: Interest Income Dividend Income Annuities Royalties (non trade or business) Long Term Capital Gains from the disposition of investment property. (NOTE: Net long term capital gains are only included as investment income if elected on Form 4952. If thi...

investment income
The income received from investment in securities and property. It includes rent from property, dividends from shares in corporations, and interest from bonds, guaranteed investment certificates, bank accounts, certificates of deposit, Treasury bills, and other financial securities....

investment share of GDP
the proportion of GDP that is used for investment; equals investment divided by GDP, or I/Y. Sometimes called investment rate....

investment style
Describes the personality of the fund as determined by the securities in which it invests....

invoice
A term describing an original document either issued by a business for the sale of goods on credit (a sales invoice) or received by the business for goods bought (a purchase invoice)....

inward investment
investment liabilities of residents, securities issued by domestic residents and owned by nonresidents...

irredeemable bond
A bond that does not have a call feature or a redemption privilege. A call feature allows an issuer to redeem the bond before its maturity and a redemption privilege allows a bondholder to redeem the bond before its maturity....

irredeemable securities
Securities, such as some debentures (perpetual debentures) and certain government loan stock (Consols) which do not have a redemption date that is there is no date specified for repayment of capital....

irregularity
Irregularity refers to the intentional misstatement or omission of significant information in accounting records, financial statements, other reports, documents or records. Irregularities include (a) fraudulent financial reporting which renders financial statements misleading and (b) misappropriation of assets....

ISDA
The International Swaps and Derivatives Association (ISDA) is the leading global trade association representing participants in the privately negotiated derivatives industry, a business which includes interest rate, currency, commodity and equity swaps, as well as related products such as caps, collars, floors and swaptions. ISDA was chartered in 1...

ISDN
The plain old telephone system doesn`t handle large quantities of data, and the phone companies realized this a long time ago. So the ISDN spec was hammered out in 1984 to allow for wide-bandwidth digital transmission using the public switched telephone network. Under ISDN, a phone call can transfer 64 kilobits of digital data per second. But it`s ...

ISIC
International Standard Industrial classification of all economic activities...

ISIN
A code that uniquely identifies a specific securities issue. The organization that allocates ISINs in any particular country is the National Numbering Agency (NNA)....

IS-LM model
A Keynesian macroeconomic model, popular especially in the 1960s, in which national income and the interest rate were determined by the intersection of two curves, the IS-curve and the LM-curve. IS-curve: In the IS-LM model, the curve representing the combinations of national income and interest rate at which aggregate demand equals supply for all ...

ISM Index
The Institute for Supply Management releases a monthly composite index based on surveys of 300 purchasing managers nationwide representing 20 industries regarding manufacturing activity. Index values above 50 indicate an expanding economy, while values below 50 are indicative of contraction. This so-called diffusion index is calculated as the perce...

issue date
Date on which the product is launched....

issue linkage
The intertwining of issues in disputes is known in the literature on international relations as issue linkage. A case of issue linkage occurs when one party in a dispute introduces a new issue into the dispute, demanding that the issues be resolved together. Existing studies of issue linkage focus on cases where the states in a dispute have separab...

issue price
The gross price placed on a new bond issue, expressed as a percentage of the principal amount....

issuer
the entity which is obligated on a security or other financial instrument. For example, a corporation or government having the authority to issue and sell a security; or a bank that approves a letter of credit. Issuer is sometimes used to refer to a financial institution that issues credit or debit cards....

issuer
The entity, such as a corporation or municipality, that offers or proposes to offer its securities for sale. Also the creator of an option sometimes referred to as the writer. One exception if that there is considered to be no issuer for certificates of interest or participation in oil, gas, or mining titles or leases where payments are made out of...

issuing institution
the institution receiving funds in exchange for value distributed in the system, and, in principle, being obliged to pay or redeem the customer`s transactions and unused funds which are presented to it. It is normally the institution which invests the float....

IT Applications Working Group
A working group of the Information Technology Committee (an ESCB committee)...

IT Section
IT Section refers to the Systems Development Division and the Technical Support Division in the Payment Systems and Information Technology Section of the OeNB...

Iterated Cumulative Sums of Squares
method developed by Inclán and Tiao (1994)...