Banco de España - General Glossary

General Glossary

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Balance/Available balance: In accountancy, the balance is the difference between credit and debit. In a current account, a debit balance expresses the account holder's debt with the entity, while a credit balance expresses the entity's debit with the customer, that is, an amount that can be drawn by the customer. The available balance is that which may be freely used. Balance and available balance do not always coincide, as part of the former may be withheld to fulfil a payment order which has been processed but not yet settled.
Banker's cheque: A document issued by a banking entity which obliges it to pay a certain amount of money.
Bank guarantee: Guarantee issued by a financial institution in favour of a customer thereof.
Banking ombudsman: An agency created by Law 44/2002, on Financial System Reform Measures, in conjunction with the Investment Ombudsman, the Insurance Ombudsman and the Pensions Ombudsman. Its explicit purpose is to protect banking service users' rights through the resolution of credit institution-related complaints, claims and consultations. It is associated with the banking supervisor, that is, the Banco de España, although with maximum autonomy of action. The law establishes that the person appointed as Ombudsman must be of renowned prestige in the economic and financial sphere with the necessary professional experience.
Benchmark portfolio: In relation to investments, benchmark portfolio or index constructed on the basis of the objectives for the liquidity, risk and return on the investments. The benchmark portfolio serves as a basis to compare the behaviour of the actual portfolio.
Bill discounting: A financial operation through which a quantity is deducted from capital before its maturity date, in order to obtain it immediately. The quantity deducted is the price paid for the operation by the person who demands the funds and the return obtained by the party who offers the funds. For example, the discount of a bill of exchange allows its maturity to be brought forward in exchange for a reduction in its value.
Bill of exchange: A payment order whereby the person who issues the document (the drawer) requests the payment of a certain amount of money by the drawee on a specific date (maturity) in favour of a third-party, whose name must appear on the bill. It is tradable and can be endorsed.
Bond market: Market on which long-term securities other than shares are issued and traded.
Bonds: Financial instruments whose future performance is known in advance, regardless of the results obtained by the issuing entity.
Bonds: The name for the debt instruments issued by private companies or public institutions. They are characterised for offering the investor a fixed remuneration which is determined at the time of issuance.
Borrower: The person who receives an amount of money with the obligation to return it, together with the agreed interest, at the end of a fixed period.
Bridging loan: A loan obtained as temporary financing and with the collateral of a future payment from the borrower that will enable him to pay it off.