Glossary

General Glossary

F

Face and orientation sorting 

Mechanical operations to place banknotes in a particular position. Facing is the operation which places banknotes with their obverse side up, looking at the observer. Once faced, orientation consists of placing the unprinted area of the watermark to the left and the main printed image to the right. The historic source of these terms comes from the fact that banknotes traditionally bore a portrait on their obverse side, and so facing consisted of placing all the portraits of faces looking at the observer and orientation placing the head of the portrait facing upwards. On euro banknotes there is no portrait, but the main image on their obverse side (windows and gateways) fulfils a similar function. It is easier to machine process banknotes if they are sorted.

Factoring  

A contract whereby a person or company transfers the credit derived from its commercial activity to another person or company which is in charge of managing collection thereof. It is not specifically regulated in Spanish Law. It is based on freedom of contract.

Fibres 

A security feature on banknotes that is incorporated during the manufacturing of the paper. The fibres can be coloured and visible to the naked eye, such as in the US dollar bills, or colourless and fluorescent, as in euro banknotes.

Financial account 

A balance of payments account that covers all transactions in direct investment, portfolio investment, other investment, financial derivatives and reserve assets, between residents and non-residents.

Financial future  

A contract traded on an organised market, whereby the parties agree on the purchase/sale of a specific amount of securities (underlying asset) on a predetermined future date at a previously agreed price.

Financial intermediaries  

Institutions that serve as an interface between economic units that wish to save or invest their funds, and those that wish to borrow funds. Normally, funds are received on a short-term basis (through current accounts, deposits, etc.) and are loaned on a long-term basis (extending loans, buying shares, debentures, etc.).

Financial markets 

Markets in which those who have a surplus of funds lend to those who have a shortage.

Financial stability 

A situation in which the financial system (comprising financial intermediaries, markets and market infrastructures) is capable of resisting shocks and resolving financial imbalances, thereby reducing the possibility of disruptions in the financial brokerage process which seriously affect the allocation of savings to profitable investments.

Fine-tuning operation 

An open market operation executed by the Eurosystem to deal with unexpected liquidity fluctuations in the market. The periodicity and maturity of these operations are not regulated.

Fixed interest rate 

A transaction (for example a mortgage loan) takes place at a fixed rate of interest where this remains unaltered during the life of transaction.

Fixed rate tender 

Tender procedure, in which the interest rate is specified in advance by the central bank and in which participating counterparties bid the amount of money they want to transact at that interest rate.

Fixed-term deposit  

A time deposit, that is, non-refundable until maturity, except in the case of penalisation if thus stipulated in the contract. Depending on the entity, it can be formalised in a bankbook.

Fluorescence 

Visible radiation emitted by certain substances on being illuminated by invisible radiation such as ultraviolet light rays. Examples of fluorescence in document security are the fluorescent fibres incorporated in the paper, and the fluorescent dyes included in many banknotes, cheques and plastic cards.

Fluorescence in daylight 

The term used for the fluorescence of ink under white light.

Foreign currency  

Foreign currency is understood to be the banknotes issued by foreign banks and bank balances denominated in foreign currency. Any right expressed in foreign currency and payable abroad (for example, a cheque) is also considered foreign currency.

Foreign trade of goods 

Exports and imports of goods outside of the euro area, measured in nominal and real terms and as unit value indexes. Foreign trade statistics are not comparable to the exports and imports recorded in national accounts, as these include transactions inside and outside of the euro area and also combine goods and services. Neither are they fully comparable to the goods item under balance of payments statistics. In addition to methodological adjustments, the main difference lies in the fact that in foreign trade statistics, imports are recorded together with insurance and freight, while they are recorded without loading costs under the goods items under balance of payments statistics.

Forward market 

A market where purchases/sales of assets with future settlement are traded at a price fixed at the time of trading.. As opposed to the futures market, there is no clearing house that interposes between the parties nor are the terms standardised.

Four-colour printing (quadrichromy) 

Printing which combines the three primary colours, yellow, magenta and cyan and black as a key colour, in order to achieve the maximum print contrast.

Fuel cheque/autocheque  

A document issued by a bank that allows fuel to be acquired, guaranteeing payment to the supplier.

Futures market 

Organised derivatives market with a clearing house that interposes between the parties, wherein standard forward purchases and sales of an underlying asset are traded at a price fixed at the time of trading.