T2 is the Eurosystem’s new individual payment system. It was launched in March 2023, replacing the previous payment system, TARGET2. T2 consists of central liquidity management and a component for the settlement of individual payments. Central banks use central liquidity management for, amongst other things, settling monetary policy operations, such as the payment of loans to banks. Here, the banks manage their entire central bank liquidity and direct it – within TARGET services – towards their various purposes. Banks use the component for settling individual payments in order to transfer payments (often large amounts) in central bank money securely and in a matter of seconds. The T2 service is also used by some central banks of the European Union in countries which have not yet adopted the euro, enabling their banks to settle urgent euro payments in central bank money in a simple and convenient manner. T2, like its predecessor TARGET2, is the largest individual payment system in Europe and is one of the most important in the world. The Eurosystem entrusts four national central banks – the Banque de France, Banca d’Italia, Banco de España and Deutsche Bundesbank – with developing and operating T2.

TANs (transaction authentication numbers) are typically used in online payment procedures. They are mainly required when entering online payment transactions and are only known to the online banking user and the bank's system. This protects against misuse by third parties. In the past, TANs were provided to the user in the form of a printed list. Nowadays, TANs are generated by the bank in various ways just before their use in a particular transaction and transmitted to the payer via text message, for example.

Tapering is the process of scaling back  a central bank's bond purchases as part of quantitative easing. This is clearly communicated in advance by the respective central bank and implemented gradually with minimal market impact. In contrast to quantitative tightening, the central bank does not reduce the money supply through tapering, but merely reduces the growth of central bank money.

TARGET balances are a national central bank’s claims on (positive TARGET balance) or liabilities towards (negative TARGET balance) the European Central Bank. They occur when commercial banks settle cross-border transactions in central bank money using TARGET services. For example, a credit transfer from France to Germany using T2 gives rise to a Bundesbank claim on the Banque de France. If such claims and liabilities between central banks do not balance out over the course of a day, they are offset at the end of the business day to form a single (net) claim on, or liability towards, the ECB. Thus, each national central bank has just one TARGET claim on, or liability towards, the ECB. 

TARGET Instant Payment Settlement (TIPS) is the TARGET service for settling instant payments and enables euro payment orders in central bank money to be settled within ten seconds. This is possible all day, every day, all year round (24/7/365). The service was launched in November 2018 and is one of the TARGET services, which also comprise T2, TARGET2-Securities and, from June 2025, ECMS.

TARGET services enable the Eurosystem to offer the European banking community a uniform and integrated range of services in the areas of liquidity management and individual payments (T2), securities settlement (TARGET2-Securities) and the settlement of instant payments (TIPS). The central liquidity management component allows banks to centrally and easily manage their total liquidity at central banks across all services. In addition, overarching components such as jointly used reference data and shared billing will simplify conducting business. The TARGET services are operated by the four national central banks – the Banque de France, Banca d’Italia, Banco de España and Deutsche Bundesbank. From June 2025 onwards, TARGET services will be complemented by the ECMS (Eurosystem Collateral Management System).

TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer system) was a Eurosystem system for the fast and secure settlement of electronic individual payments in euro. It was replaced by the new T2 service on 20 March 2023. Since its introduction in November 2007, TARGET2 was mainly used by banks to transfer large amounts in a matter of seconds. TARGET2 was based on a single shared platform (SSP) and guaranteed the rapid exchange of central bank liquidity between the national money markets. It provided participants with harmonised services at standardised prices for both domestic and cross-border payments. The use of TARGET2 was mandatory for the Eurosystem’s main refinancing operations. The Eurosystem entrusted three national central banks – the Banque de France, Banca d’Italia and Deutsche Bundesbank – with developing and operating the single shared platform. 

TARGET2-Securities (T2S) is a service provided by the Eurosystem enabling the harmonised and centralised settlement of securities transactions in central bank money. T2S is one of the TARGET services. Its main objective is to make the cross-border settlement of securities transactions in central bank money more secure and affordable as well as to overcome the previous fragmentation of the European market. It also holds a great deal of potential for banks operating on a cross-border basis, in particular, in terms of optimising their liquidity and collateral management. T2S is limited exclusively to the settlement of securities transactions. Transactions are mostly settled on a delivery-versus-payment basis. This ensures that the delivery of the traded security and the corresponding payment take place at the same time, thus eliminating counterparty credit risk. The payments are made in central bank money. T2S is operated jointly by the Deutsche Bundesbank, Banque de France, Banca d’Italia and the Banco de España on behalf of the Eurosystem.

Targeted longer-term refinancing operations (TLTROs) were introduced to stimulate commercial banks’ lending to the euro area economy and to strengthen the transmission of monetary policy. The basic idea is that, the more loans issued by commercial banks to the economy, the more attractive the interest rate on their TLTRO borrowings becomes. The first series (TLTRO I), with a maturity of up to four years, was approved by the Governing Council of the ECB in June 2014. This was followed in 2016 by a second series (TLTRO II), with a maturity of four years, to further strengthen lending. In March 2019, the Governing Council of the ECB adopted a third series (TLTRO III), with a maturity of three years, which was recalibrated during the coronavirus pandemic.

In monetary policy parlance, the term tender describes a standardised bidding procedure through which the central bank supplies the banking system with central bank money (“liquidity”). In a tender procedure, commercial banks submit bids, on the basis of which the central bank then allocates central bank money to them. Depending on the nature of the tender, banks’ bids may refer to the volume of central bank money they want at an interest rate specified by the central bank (fixed rate tender); alternatively, banks specify what volume of central bank money they wish to transact at what interest rate (variable rate tender). Within the Eurosystem, tender procedures are used for main refinancing operations and for longer-term refinancing operations.

The term structure of interest rates describes the relationship between maturities and interest rates on the bond market. The term structure is said to be normal when yields rise as maturities of otherwise similar investments lengthen. A term structure in which yields decline as the term of otherwise similar investments increases is called an inverted term structure. The graphical representation of interest rates on a given issuer's securities with various maturities is known as the yield curve.

The “magic triangle” of investment refers to the conflict between the different objectives of an investment. None of these objectives can be achieved to their fullest potential because they are in competition with one another. These objectives are the return, risk and liquidity of an investment. For example, a particularly safe investment often generates a smaller return than a riskier investment. Similarly, investments which tie up capital for a long time (low liquidity) often generate higher returns than those that are available on a daily basis (high liquidity). This problem means that it is not possible for an investment to be safe, instantly accessible, and offer high returns all at the same time.

A third-party issuer is a payment card issuer that does not hold the account to be debited with the card transactions, ie the card-issuing institution is not the same as the institution that manages the payer’s account.

The term third-party payment service provider is often used for providers of account information and payment initiation services that have been subject to authorisation and registration since the implementation of the second Payment Services Directive (PSD2). It is also used to refer to third-party issuers.

Time deposits are taken by a bank from its customers or other institutions for a specified period and at a fixed interest rate. They are also known as term money or a fixed-term deposit. Time deposits commonly run for six months, one year or three years and normally yield a higher rate of interest than savings deposits.

On the back of a recommendation issued by the Financial Stability Board (FSB), the G20 countries agreed to gradually implement a further regulatory tool, known as total loss-absorbing capacity (TLAC), to be phased in from 2019 for global systemically important banks (G-SIBs). Based on the aforementioned FSB recommendation, from 2019 onwards, the world's 30 largest banks are to be required to maintain a TLAC of 16% of their risk-weighted assets or 6% of their unweighted assets. From 2022, the required level will increase to 18% and 6.75% respectively. The TLAC comprises capital and other elements such as bonds which can be converted by the bank into liable capital. The TLAC standard forms part of international efforts to solve the "too big to fail" problem. The aim is to enable even systemically important banks, in particular globally interconnected banks, to be wound up in future without putting financial stability or the real economy at risk or burdening the taxpayer.

The trade balance is part of the current account, which forms part of the balance of payments. It captures the cross-border movement of goods (foreign trade). If the value of exports exceeds the value of imports, this is known as a positive trade balance, or a trade surplus. A situation in which imports outweigh exports is known as a negative trade balance, or a trade deficit.

A trade repository is an enterprise that operates an electronic database to document the conclusion, modification and termination of derivatives contracts. The objective is to increase transparency on the financial markets. Under the European Markets Infrastructure Regulation (EMIR) it was decided that standardised OTC derivatives within the meaning of the Regulation needed to be cleared via central counterparties and that OTC derivatives had to be registered with trade repositories. In total, four trade repositories have been approved by the European Securities and Markets Authority (ESMA).

Under the Capital Requirements Regulation (CRR), the trading book of a credit institution includes all positions in financial instruments and commodities held by an institution with a view to reselling them in the short term, ie with trading intent. In general, such positions serve to benefit from fluctuations in market rates or prices, or they arise from client servicing and market making. Furthermore the trading book includes positions that serve to hedge positions held with trading intent in the trading book. Positions in the trading book are either free of restrictions on their tradability or are able to be hedged. All trading book positions should be revalued daily in accordance with the CRR requirements for prudent valuation.

A transferable deposit is a credit balance held on a bank account which the customer can call at any time, either by having the balance paid out in cash or by using it for cashless payments. From the bank's perspective, these deposits, unlike savings and time deposits, are available without advance notice.

The transmission mechanism describes how a monetary policy measure, changing the key interest rate for instance, affects economic variables such as the price level, output and employment. The transmission of monetary policy measures can occur across different "channels", meaning that some effects are produced very quickly, while others require a great deal of time. The type and extent of these effects on the ultimate objective are often uncertain.

The new Transmission Protection Instrument (TPI) announced in the summer of 2022 is intended to support the effective transmission of monetary policy and thereby ensure that the monetary policy stance is transmitted smoothly across all euro area countries in the event that the yields on government bonds diverge too greatly. Subject to fulfilling established criteria, the Eurosystem will be able to make secondary market purchases of securities issued in jurisdictions experiencing a deterioration in financing conditions not warranted by country-specific fundamentals, to counter risks to the transmission mechanism to the extent necessary. Purchases of private sector securities could be considered, if appropriate. The scale of TPI purchases would depend on the severity of the risks facing monetary policy transmission.

The Governing Council will consider a cumulative list of criteria to assess whether the jurisdictions in which the Eurosystem may conduct purchases under the TPI pursue sound and sustainable fiscal and macroeconomic policies.

Bills of exchange issued by the public sector with maturities ranging from a few days to six months. They are issued in the form of discount paper, i.e. the purchaser only pays the discounted amount of the bill and receives the full amount back upon maturity.

The Treaty establishing the European Community (EC Treaty) was signed in Maastricht in 1992 and came into effect in 1993. The EC Treaty emerged from the EEC Treaty, which had established the European Economic Community (EEC) in 1957. The EC Treaty was renamed the "Treaty on the Functioning of the European Union" (TFEU) when the Treaty of Lisbon took effect on 1 December 2009. Together with the "Treaty on European Union" (EU Treaty), the TFEU is one of the founding treaties of today's European Union.

The Treaty of Lisbon, which was signed in 2007 and came into force in 2009, comprises the Treaty on European Union (EU Treaty) and the Treaty on the Functioning of the European Union (TFEU). Predecessors to the Treaty of Lisbon were, inter alia, the Maastricht Treaty (1992-93), the Treaty of Amsterdam (1997-99) and the Treaty of Nice (2001-03), which replaced the original EEC and EC Treaty. The Treaty on European Union contains, amongst other things, provisions on the bodies of the EU, such as the European Parliament, the European Council and the EU Council (also called Council of Ministers). The Treaty on the Functioning of the European Union contains, amongst other things, the framework for economic and monetary policy.

The Treaty on European Union (EU Treaty), also known as the Maastricht Treaty, forms the basis for the political union with a common economic and monetary policy, common foreign affairs and security policy, and closer cooperation in the areas of justice and domestic policy. The EU Treaty was signed in Maastricht in 1992 and came into effect in 1993. Together with the "Treaty on the Functioning of the European Union" (TFEU), it is one of the founding treaties of today's European Union.

The Treaty on Stability, Coordination and Governance in the EMU is an agreement intended to promote budgetary discipline in the participating EU member states, primarily through a fiscal pact. The TSCG entered into force on 1 January 2013. On the basis of the Stability and Growth Pact, which has already been revised through the six pack regulations, the TSCG stipulates inter alia that a government’s structural deficit is to be capped at 0.5 per cent of gross domestic product. A breach of this ceiling triggers automatic correction mechanisms. The TSCG was signed by all EU member states at that time, except the United Kingdom and the Czech Republic.

The Treaty on the Functioning of the European Union (TFEU) defines the objectives of the European Union and the scope for action within the policy areas of the EU. It also defines the structure and responsibilities of the EU institutions, including the European Central Bank. The TFEU is based on the 1957 Treaty of Rome and was originally known as the "Treaty establishing the European Economic Community", but was renamed when the Treaty of Lisbon came into effect on 1 December 2009. Together with the "Treaty on European Union" (EU Treaty), it is one of the founding treaties of the European Union.

Troika is the name used to describe the body comprising the European Central Bank, the International Monetary Fund and the European Commission which was formed in response to the outbreak of the European sovereign debt crisis in 2009. The Troika monitors whether the member states which were granted aid from the European Stability Mechanism (ESM) or bilateral loans from other member states during the crisis comply with the conditionality of the financial support.

Until July 2021, the Governing Council relied on the so-called two-pillar strategy in order to ensure its primary objective of price stability. The two pillars consisted of the economic and the monetary analysis. The economic analysis looked at short to medium-term real economic indicators (e.g. potential output, wage development), while the monetary analysis looked at longer-term, monetary indicators (e.g. growth of the money supply). The information obtained from each of the two pillars was cross-checked to ensure that no relevant information was overlooked.

In July 2021, the Governing Council decided to replace the two-pillar strategy with an integrated analytical framework.