In banking language, the investment and borrowing options that banks offer to their counterparties are referred to as facilities. In the context of European monetary policy, the deposit facility is an instrument that provides commercial banks with the option of depositing central bank money with the European Central Bank (ECB). The option open to commercial banks to obtain overnight liquidity from the ECB is known as the marginal lending facility.

"Fair value" is the outcome of a valuation procedure for assets in international accounting. Prices quoted on an active market offer the best guidance for determining the fair value. In the absence of an active market, the enterprise can itself determine the value using a valuation procedure.

Federal bonds (Bunds) are long-term debt securities issued by the German Federal government to cover its borrowing requirements. They normally have a maturity of ten years and a fixed nominal coupon, but Bunds with 30-year terms are also issued.

The Federal Financial Supervisory Authority (BaFin) supervises Germany’s financial sector and is headquartered in Bonn. It has the status of an independent public law institution and is subject to the legal and administrative supervision of the German Federal Ministry of Finance. In addition to supervising banks, financial service providers, insurers and securities traders in Germany, it is also responsible for consumer protection as well as the combating and prevention of money laundering and terrorist financing. In 2018 the Financial Market Stabilisation Agency's (FMSA) function as National Resolution Authority was incorporated into BaFin. BaFin represents the Federal Republic of Germany on numerous international supervisory bodies. Within the framework of the SSM, BaFin and the Bundesbank cooperate closely in the field of banking supervision. They also work together on the German Financial Stability Committee, where they are engaged in macroprudential oversight in Germany.

Federal notes are debt securities issued by the German Federal government with a maturity of five years and a fixed nominal coupon.

Designed specifically for retail investors, Federal savings notes are Federal debt securities that have a maturity of either six (type A) or seven years (type B) and tiered coupons. Type A notes pay out interest annually while type B notes accumulate the remuneration and pay it out at maturity. The Federal government stopped issuing Federal savings notes in 2013.

Federal securities are debt securities issued by the German Federal government and special funds of the German Federal government. There are several types of Federal securities, including Federal bonds, Federal notes, Federal Treasury notes (Schätze), Federal savings notes (type A and type B), Federal Treasury financing paper and Federal Treasury discount paper, which differ particularly in terms of their maturities and coupons. The Federal government sometimes also issues inflation-protected bonds. As a result of Federal securities' low risk of default, their yields are regarded as a benchmark in the euro capital market for the other bonds with similar maturities.

The financial account is the part of the balance of payments that records all international purchases and sales of assets. Instead of "income" and "expenditure", the financial account uses the terms "net acquisitions of financial assets" and "net incurrence of liabilities". A positive sign in front of an item indicates a net increase, while a negative sign denotes a net decrease. The transactions recorded are usually divided into five sub-components: direct investment, portfolio investment, financial derivatives, other investment and reserve assets.

As part of the financial accounts, the Bundesbank’s statistics record the financial assets and liabilities of households and non-financial corporations as well as their acquisition of financial assets and financing.

A financial conglomerate is a group of companies which includes at least one insurance sector enterprise and at least one enterprise from the banking and investment services sector.

A financial intermediary is an enterprise that accepts monetary capital from investors and lends it to borrowers, or that facilitates dealings between investors and borrowers. The term typically refers to banks and insurance companies.

"Financial market" is the overarching term for all the markets on which financial instruments are traded. Some financial markets operate according to clear and precise rules, exchanges being one example. Others are based on trading practices such as over-the-counter (OTC) trading between banks.

The Financial Market Stabilisation Agency (FMSA) was established in October 2008 to support German banks in their efforts to overcome the financial market crisis. It is an agency of the Federal Republic of Germany and is supervised by the Federal Ministry of Finance.

Alongside managing the Financial Market Stabilisation Fund’s various investments in credit institutions, the FMSA was responsible for collecting the bank levy for the Restructuring Fund and, from 2016, for the Single Resolution Fund in Germany. From 2015 to the end of 2017, the FMSA also served as Germany’s national resolution authority. In this context, under the direction of the Single Resolution Board, the FMSA was responsible for creating resolution plans and, if necessary, for the resolution of banks located in Germany. In 2018, the administration of the Financial Market Stabilisation Fund was integrated into the Germany Finance Agency (Finanzagentur GmbH), and the role of national resolution authority was assumed by the Federal Financial Supervisory Authority (BaFin).

As a result, the FSMA is now only responsible for the expanded legal supervision of Portigon AG and the resolution agencies established under its umbrella – FMS Wertmanagement and Erste Abwicklungsanstalt.

SoFFin is a special fund of the Federal Government created in October 2008 under the Financial Market Stabilisation Act and managed by the Financial Market Stabilisation Agency (FMSA). SoFFin’s task is to stabilise the financial system in Germany. The fund can guarantee debt securities issued by banks, acquire shares in financial enterprises and thereby increase their equity capital, and, by buying a stake, assume banks' risk positions. Furthermore, up until 31 December 2014, banks could establish their own resolution agencies ("bad banks") under the aegis of the FMSA. SoFFin was closed for new measures at the end of 2015. SoFFin's administration and the management of the remaining shareholding were incorporated into the Finance Agency in 2018.

A financial services institution is a business enterprise that is not a bank, but carries out similar business, in particular investment services, as set out under section 1 (1a) of the German Banking Act (e. g. investment advice or leasing transactions).

Financial stability (also: financial system stability) exists when the financial system is able – even in times of tension or upheaval – to fulfil its functions and settle all kinds of financial transactions and payments safely and efficiently. As part of their macroprudential mandate, supervisory authorities monitor the financial system at the national and the supranational level in order to prevent systemic crises which might jeopardise financial stability. In Germany, the Federal Financial Supervisory Authority (BaFin), the Deutsche Bundesbank, the Federal Ministry of Finance and the Financial Market Stabilisation Agency (FMSA) – which together make up the German Financial Stability Committee – work together to safeguard against risks to financial stability. At the European level, the European Systemic Risk Board (ESRB) performs a similar task.

The Financial Stability Board (FSB) coordinates at the international level the work of national financial supervisory authorities and international standard-setting bodies in the financial sector. It consists of representatives from central banks, finance ministries, supervisory authorities and international organisations. The FSB's secretariat is located at the Bank for International Settlements. The FSB is the successor of the Financial Stability Forum (FSF), which was set up by the G7 finance ministers and central bank governors in early 1999 with the objective of organising international cooperation and coordination in the supervision and oversight of the financial system. The London G20 summit in April 2009 agreed that the organisation be renamed FSB and given an extended mandate and membership.

The Financial Stability Committee (FSC) is a European-level body based at the European Central Bank (ECB). The FSC should not be confused with the German Financial Stability Committee (G-FSC), which is responsible for macroprudential supervision of the German financial system. The FSC was established in 2011 to advise and support the ECB in its responsibilities and decisions regarding financial stability. The members of the FSC are national central banks, national banking supervisory authorities and the ECB. In particular, the ECB has the option of tightening certain macroprudential tools for selected European banks. The FSC therefore constantly analyses the risk situation in Europe and is tasked with identifying macroprudential imbalances and recommending appropriate measures to reduce imbalances. The FSC's analyses and decision proposals form the basis for the ECB Governing Council's macroprudential decisions.

In the stricter sense, the financial system comprises financial markets, financial intermediaries, and payment and securities settlement systems. In a broader sense, it also includes the structures for financial market oversight and the legal framework, including the accounting standards. During the financial crisis, which began in 2007, the international financial system came close to collapse due to payment difficulties experienced by major banks and the resulting general loss of confidence. Since then, safeguarding the stability of the financial system has become an even more important task for central banks and supervisory bodies.

A financial transaction tax is a tax on trade with financial instruments. The European Commission presented a draft directive to this effect in 2013 but there has not been a decision on an implementation as of October 2017. According to the draft, this tax will apply to institutions located and financial instruments issued in the participating countries. Equity shares and bonds are to be taxed at 0.1 per cent of the trading volume and derivatives at 0.01 per cent of the nominal value; transactions with the ECB, EFSF, ESM, EU and national central banks are to be exempt from this tax. The financial transaction tax is often associated with James Tobin, the Nobel laureate in economics who, as a reaction to the end of the Bretton Woods system, proposed a tax on international foreign exchange transactions (Tobin tax) in 1972 to curb short-term speculation.

Fine-tuning operations are one of the monetary policy instruments used by the Eurosystem to balance out short-term fluctuations in bank liquidity. By conducting fine-tuning operations such as reverse transactions or foreign exchange swaps, the Eurosystem can provide or absorb liquidity at short notice. To temporarily absorb liquidity, the Eurosystem also has the option of offering banks the collection of fixed-term deposits.

The term “FinTech” is a portmanteau of “financial services” and “technology” and refers to enterprises which provide specialised financial services using modern technology. The term can also be used to refer to technologies used in the financial sector.

First-round effects show the impact of changes in the prices of individual goods or services - often stemming from external influences - on general price developments. For example, a sharp rise in crude oil prices results in a direct increase in the prices of many oil products, such as petrol or plastic (direct first-round effect). In addition, the increase in the crude oil price will also be reflected in price increases for other goods and services that utilise oil products (indirect first-round effect). Air travel, which requires aviation fuel, is one example. Monetary policymakers are usually not in a position to influence the original first-round price change or the ensuing effects on the inflation rate. Nevertheless, first-round effects are merely a temporary phenomenon affecting the rate of inflation. This is because an original, one-off price change can no longer be measured in the inflation rate after one year, as this rate represents price developments over a twelve-month period. However, monetary policy aims to prevent first-round price rises from setting in motion an inflationary process. The objective is thus to prevent potential second-round effects.

Fiscal policy refers to:

• the targeted organisation of government revenue and expenditure. Fiscal policy tasks and objectives include, for example, making fundamental decisions regarding the scope of public goods and services provided by the government, securing sustainable inflows of revenue, ensuring fairness in the tax system and, where necessary, endeavouring to moderate the business cycle and guarantee steady economic growth through countercyclical fiscal policy measures.
• all government measures designed to influence economic developments through adjustments to the government revenue and expenditure programme. Pursuit of a countercyclical fiscal policy constitutes a political strategy aimed at combatting cyclical fluctuations in economic activity by means of targeted changes to the government revenue and expenditure model and at guaranteeing stable economic growth.

A fixed exchange rate occurs when the exchange rate between two currencies is not determined on the foreign exchange market as a result of supply and demand, but is officially set. A fixed exchange rate can either be unilateral (currency board) or agreed upon by both of the countries concerned. In an exchange rate arrangement (eg Bretton Woods system), several participating countries agree on fixed exchange rates. In order to maintain the exchange rates they set, the participating central banks carry out interventions in the foreign exchange markets - buying or selling foreign exchange - depending on market conditions. The key aim of a fixed exchange rate is to eliminate exchange rate fluctuations and the associated risks and costs, and hence to promote foreign trade.

A fixed rate tender is a bidding and allotment procedure generally used as part of the Eurosystem’s open market operations. In a fixed rate tender, the Eurosystem specifies the interest rate in advance and how much central bank money (liquidity) it is prepared to provide to the banking system for the operation. The participating banks bid on the amount of central bank money they want to transact. If total demand is higher than the amount provided by the Eurosystem, each bank is allocated an amount proportional to its bid which is measured as a share of total planned allotment divided by the total bid amount (scale-back). As an alternative to the fixed interest tender, the Eurosystem can also issue variable rate tenders.

A floater is a variable-rate debt security, meaning that the interest coupon on the security changes at pre-specified dates in line with changes of the reference interest rate.

Floating exchange rates are freely determined on the foreign exchange markets as a result of supply and demand. Unlike fixed exchange rates, they are formed essentially without government intervention, meaning that they fluctuate over time. Nowadays, the major currencies such as the euro and the US dollar have floating exchange rates.

Foreign cash, i.e. foreign coins and banknotes.

Foreign exchange refers to credit balances or claims in the form of book money or securities, denominated in foreign currency. They represent a claim to payment in the corresponding foreign currency. Foreign coins and banknotes are not included in foreign exchange.

Currencies are traded on the foreign exchange market. Trading takes place primarily between banks. A currency's exchange rate is determined by the supply and demand for that currency.

Foreign exchange policy is that part of economic policy that deals with the relationships between a country’s own currency and foreign countries. Foreign exchange policy issues could be, for instance, the choice of exchange rate regime (fixed or floating exchange rates), membership of a monetary union and, in some cases, the introduction and specification of capital controls. The term "foreign exchange policy" is occasionally also used to mean monetary policy due to historical reasons.

The foreign exchange reference rates of the European Central Bank (ECB) are exchange rates set by the ECB each business day on the basis of a concertation procedure between the Eurosystem's national central banks. They state the exchange rate between a given currency pair. Other institutions such as commercial banks also calculate exchange rates, but the ECB's exchange rates are the only official ones and are used to assess annual financial statements, tax returns, statistical reports or economic analyses.

A foreign exchange swap involves buying a specified currency amount and - at the same time - agreeing to resell it at a later date. The difference between the two exchange rates – for the purchase and subsequent sale – is called the swap rate. Foreign exchange swaps are used by banks, for instance, to hedge against exchange rate risk when speculating on interest rates in a foreign currency. The Eurosystem can carry out foreign exchange swaps – a variant on repurchase agreements – with banks as part of its fine-tuning operations. If the Eurosystem buys foreign currency against euro, this transaction injects central bank money into the banking system. At the end of the term of the transaction, reversal thereof will withdraw euro central bank money from the banking system. If the Eurosystem sells foreign currency against euro, this transaction first withdraws euro central bank money from the banking system, and then injects it again on reversal of the transaction.

Concrete forms of money. Initially, only cloth and other goods were used as money, with the monetary value being derived from the value of the goods in question. In early money economies, the goods used as money were usually rare and sought-after resources, such as cowry shells, salt, feathers, furs or livestock (latin pecus = cattle, pecunia = money). Over time, metals and precious metals (copper, silver, gold) replaced other goods as money. The most developed form of goods used as money were the full-bodied coins, where the nominal value engraved on the coin corresponded to its weight and fineness. With the introduction of fractional coins (below face-value coins) and banknotes, the use of goods as money was replaced by money with little or no intrinsic value of its own. The monetary value was completely unrelated to the value of the substance from which it was made. Instead, its value was derived more from its scarcity and its resulting general acceptance in economic life. As paper money became more common, book money — that is, money that only appears in banks' books of account — also evolved.

In banking language, a forward is an unconditional, non-standardised transaction for future delivery which is agreed and settled between banks over-the-counter (OTC). The parties to the contract are free to negotiate the terms as they wish. Forwards are traded on a range of underlyings. Forwards on currencies and interest rates (forward rate agreement, FRA) are very common.

Forward guidance refers to a communication tool of the European Central Bank (ECB) regarding the longer-term orientation of monetary policy. When explaining monetary policy decisions, the ECB's President initially avoided statements that went beyond the decision that was to be taken at that particular point in time. This changed on 4 July 2013 when ECB President Mario Draghi said: “The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time.” The ECB switched to this form of steering expectations in order to counter undesired developments in the markets. However, the statements on forward guidance are not an unconditional promise with regard to future monetary policy measures; instead, the Governing Council of the ECB reserves the right to change its envisaged monetary policy at short notice in the event of unexpected developments. Central banks in other countries have been applying this communication tool for some time now.

A forward transaction is a transaction which does not have to be completed until a point in time which is set when the contract is entered into. For instance, a certain good or a financial instrument might have to be delivered by the seller and paid for in full by the buyer three months into the future. A distinction is made between unconditional and conditional forward transactions. In an unconditional forward transaction, the buyer enters into a commitment to purchase from the seller a certain amount of the item being traded at a later point in time at a price set in the contract (the buyer thereby takes up a "long" position); the seller undertakes to deliver on the agreed terms ("short" position). A conditional forward transaction is an option transaction. Forward transactions are entered into and settled on futures and options exchanges using standardised contracts, or over the counter (OTC) on freely negotiated terms. Forward transactions can be used to hedge against financial risk (hedging), to speculate on price changes (trading) or to take advantage of price differences between markets (arbitrage).

Fractional coins have a representative nominal value higher than their material value. Earlier, they were minted as fractions of gold and silver coins, whose nominal (face) value corresponded to their material value. Nowadays, since gold and silver coins are no longer used, practically all coins in everyday circulation are fractional coins, including the current euro coins.

Free trade is defined as trade in goods and services between economies without any trade policy influence. Trade is therefore not restricted either through tariffs, quantitative restrictions or other requirements (non-tariff trade barriers). Free trade is the opposite of protectionism.

Full allotment is a technical term used by the Eurosystem to indicate that a commercial bank will receive any amount it wishes in refinancing operations – as a tender – provided they can put forward sufficient collateral. Tenders with full allotment are one of the unorthodox measures employed by the Eurosystem in response to the financial and sovereign debt crisis. In the case of a tender with full allotment, the allotment amount is based on overall demand and is not restricted in advance, so that no scale-back is required.

The various ways in which money can be used are known as the functions of money. The main functions are as a means of exchange and payment, as a unit of account and as a store of value. In order to fulfil these functions, money must be easily divisible, stable in value and generally accepted.

In banking language, a future is an exchange-traded forward contract. Non-exchange-traded (over-the-counter) forward transactions between banks are called forwards. Futures are traded on a range of underlyings.

A futures contract is a standardised unconditional forward transaction which is agreed and settled over a futures and options exchange. Futures contracts exist for numerous items, such as wheat, gold, foreign exchange, government bonds and shares. The details of an exchange-traded futures contract, such as the precise specification of the underlying, the contract size and the term of the contract, are standardised. A futures contract is a derivative: the movement in its price depends essentially on the price of the underlying. Futures contracts are used to hedge against the risk of price fluctuations (hedging), to speculate on expected price movements in the underlying (trading) or to take advantage of price differences between markets (arbitrage). Futures contracts are to be distinguished from option contracts (conditional forward transactions).