General Glossary

General Glossary

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Leasing  
Finance lease transaction by means of a contract whose objective is to loan an asset in exchange for a fee, including an option to buy in favour of the user at the end of the contract.
Legal convergence 
Compatibility of the legislations of Member States and of the statutes of their central banks with the provisions of the Treaty establishing the European Community on the European System of Central Banks (ESCB), the statutes of the ESCB and of the European Central Bank (ECB). The European Council must assess whether to admit these States to the third and final stage of European Monetary Union (EMU).
Lender  
A natural or legal person who loans money for its return with interest.
Liability transaction  
Any transaction whereby credit institutions obtain their resources, for example, a margin deposit or current account of a customer. This denomination originates from the fact that the book entry is made under liabilities in the credit institution's balance sheet.
Liquidity risk 
The risk that a counterparty will not settle a payment obligation in full when it becomes due. Liquidity risk does not imply that a counterparty or participant is insolvent, since it may be able to effect the required settlement at some unspecified time thereafter.
Loan 
Capital given to a person under the commitment to return it, together with the agreed interest. It is usually returned in regular repayments, comprising capital and interest.