Glossary

General Glossary

D

Damaged banknote 

A legitimate banknote in a bad state of use that may even have suffered the loss of some of its elements. The Eurosystem has established rules to change these banknotes for new ones in the national central banks.

Debenture loan  

Financing method of a company which requests a loan in conjunction with a large number of investors, dividing up the debt into small participations.

Debit card 

An electronic means of payment for goods and services, whereby the charge is made instantaneously against the funds available in the holders account. It allows money to be withdrawn from automatic cash machines (a charge may apply).

Debit entry 

An entry made to an account, which implies a reduction in the balance of the account (due to cash withdrawal, payment of a direct debit, etc.).

Debt/GDP ratio (general government) 

The ratio of government debt to GDP at current market prices. The subject of one of the fiscal convergence criteria established in paragraph 2 of Article 104 of the Treaty establishing the European Commission, used to define the existence of an excessive deficit.

Debt (financial accounts) 

Loans, deposit liabilities, debt securities issued and pension fund reserves of non-financial corporations (resulting from the pension funds created by companies on behalf of their employees), valued at market value at the end of the period. However, due to data limitations, the debt given in the quarterly financial accounts does not include loans granted by non-financial sectors (for example, inter-company loans) or by credit institutions outside the euro area, whereas these components are included in the annual financial accounts.

Debt (General Governments) 

The gross debt (deposits, loans and securities other than shares, excluding financial derivatives) at their nominal value, which remains in force at year-end and is embedded between and among the general government sectors.

Deferred payment card 

A credit card that allows payment to be deferred over several instalments, where this has been agreed between the account holder and the issuing institution, in which case a previously stipulated interest is usually paid.

Deficit (general government) 

General government net borrowing, that is, the difference between total income and public expenditure.

Deficit ratio (general government) 

Proportion between the budget deficit and GDP at current market prices. It is governed by one of the fiscal convergence criteria established in paragraph 2 of Article 104 of the Treaty establishing the European Commission used to define the existence of an excessive deficit. It is also called budget deficit ratio or fiscal deficit ratio.

Deflation 

A decline in the general price level.

Demand deposit  

In general, a synonym for current account. It refers to a financial instrument wherein the amounts deposited may be withdrawn or transferred (by cheque or similar) at any time without giving the custodian prior notice.

Denomination 

The nominal value of each type of banknote in a series. The first series of euro banknotes has seven denominations (€5, €10, €20, €50, €100, €200 and €500).

Deposit  

A subsidiary obligation to guarantee the performance of another, contracted by a third party. It normally consists in depositing an asset or amount of money.

Deposit facility 

A Eurosystem standing facility which can be used by counterparties to make overnight deposits at a national central bank. Such deposits are remunerated at a pre-specified interest rate (see also, key ECB interest rates).

Deposit Guarantee Fund  

A mechanism created to guarantee deposits made by clients, up to a limit of 100,000 per depositor, in case of crisis in a bank institution. The DGF will act in cases of bankruptcy or cessation of payments of an institution, or if the latter is unable to attend the payment of demand deposits and the Banco de España concludes that its financial situation will prevent it from returning them in the short term.

Deposit institution  

Subgroup of credit institutions formed by banks, savings banks and credit co-operatives. They are the only institutions with the capacity to receive deposits from the public.

Deposits redeemable at notice 

Financial instruments consisting of savings deposits for which the holder must respect a fixed period of notice before withdrawing the funds. In some cases there is the possibility of withdrawing on demand a certain fixed amount in a specified period or of early withdrawal subject to the payment of a penalty. Deposits redeemable at a period of notice of up to three months are included in the monetary aggregate M2 (and hence in M3), while those with a longer period of notice are part of the (not monetary) longer-term financial liabilities of the Monetary Financial Institutions (MFI) sector.

Derivative  

A financial instrument whose value does not only vary according to parameters such as risk, term, etc., but also depends on the price quotation reached in the market by another asset, referred to as underlying reference asset. An investor who acquires a derivative bets on a certain movement of said underlying asset (upward or downward) in securities markets.

Derivatives market 

An organised market on which products deriving from an underlying asset, with deferred settlement and regulated features, are traded.

Destruction of banknotes 

A process whereby a central bank of a country destroys banknotes that are unsuitable for circulation.

Diffraction of light 

Deviation of light from rectilinear propagation upon encountering obstacles. This phenomenon is especially applicable when the obstacles consist of fine regular structures or diffraction grids. A specific example of such diffraction structures is the hologram used in euro banknotes.

Direct debit order  

Order given by a customer to their bank for the payment of certain obligations when presented for collection (for example, the electricity or telephone bill).

Direct investments 

Cross-border investment for the purpose of obtaining a lasting interest in a company resident in another economy (assumed, in practice, for ownership of at least 10% of the ordinary shares or voting power).

Directorate General of Insurance and Pension Funds  

Dependant upon the Secretary of State for Economic Affairs, it is in turn attached to the Ministry of Economy, with supervisory and control competencies in matters relating to private insurance and reinsurance, capitalisation and pension funds.

Documentary credit  

Operation whereby a financial institution undertakes to place an amount of money at a customer's disposal, provided that the customer provides certain documents and fulfils certain requirements.

Draw  

To extend a commercial document against a debtor.

Draw  

To issue bills of exchange, cheques, commercial papers or other payment orders.