This page shows the Balance of Payments Glossary for entries L to Q.
- L - Leasing
- Liabilities
- LIBOR
- Local authorities
- M - Merchanting
- Monetary authorities
- Monetary financial institutions (MFIs)
- Monetary gold
- Money market
- Money market instruments
- MTIC
- N - Navy, Army and Air Force Institute (NAAFI)
- Net
- Net errors and omissions
- Non-monetary gold
- Non-produced, non-financial assets
- Novations
- NPISH
- O - Official reserves
- Offshores
- Operating leasing
- Ordinary share
- Other financial intermediaries (OFIs)
- Other investment
- P - Parent
- Pension funds
- Portfolio investment
- Preference share
- Private sector
- Promissory note
- Public corporations
- Public sector
L - Leasing
In the balance of payments accounts all financial leases and some long-term operating leases (for example, for aircraft) are regarded as loans to finance the purchase of goods. The lessor thus makes a loan to the lessee who subsequently repays this with interest. The lessee is regarded as the purchaser of the goods.Liabilities
In balance of payments terminology, liabilities are the financial claims of non-residents on the UK.LIBOR
London Interbank Offered Rate. The rate of interest at which banks borrow funds from other banks, in marketable size, in the London Interbank market.Local authorities
Elected councils responsible for the administration of certain services in particular areas within the UK.M - Merchanting
Merchanting is defined as the purchase of a good by a resident from a non-resident and the subsequent resale of the good to another non-resident, without the good entering the compiling economy. The difference between the purchase and sale price is recorded as the value of merchanting services provided.Monetary authorities
Institutions (usually central banks) which control the centralised monetary reserves and the supply of currency in accordance with government policies, and which act as their governments’ bankers and agents. In the UK this is equivalent to the Bank of England and part of the Treasury (the Exchange Equalisation Account). Data is not separately available in the UK accounts for monetary authorities.Monetary financial institutions (MFIs)
Banks and building societies.Monetary gold
See ‘Gold’.Money market
The market in which short-term loans are made and short-term securities traded. ‘Short term’ usually applies to periods up to one year but can be longer in some instances.Money market instruments
Money market instruments, within portfolio investment, generally give the holder the unconditional right to receive a stated, fixed sum of money on a specified date. These are short-term instruments usually traded at a discount; the discount being dependent upon the interest rate and the time remaining to maturity. Included are such instruments as acceptances, treasury bills, commercial paper and certificates of deposit.MTIC
VAT missing trader intra-community fraud. A systematic, criminal attack on the VAT system, which has been detected in many EU member states. In essence, fraudsters obtain VAT registration to acquire goods VAT free from other member states. They then sell on the goods at VAT inclusive prices and disappear without paying over the VAT paid by their customers to the tax authorities.N - Navy, Army and Air Force Institute (NAAFI)
A body which provides goods and services for use by the UK Armed Forces abroad.Net
In this presentation of the balance of payments accounts, the term ‘net’ is generally applied only to transactions in financial assets or liabilities. Purchases of assets are recorded net of sales; similarly with liabilities. In the current and capital accounts, where the operations of UK and foreign residents are taken together in particular transactions areas, the term ‘balance’ is used.Net errors and omissions
The item included to bring the sum of all balance of payments entries to zero. Also known as the balancing item.Non-monetary gold
See ‘Gold’.Non-produced, non-financial assets
Non-produced, non-financial assets, within the capital account, include land purchased or sold by a foreign embassy, patents, copyrights, trade marks, franchises and leases and other transferable contracts, but not finance leasing. Only the purchase and sale of such assets are recorded in the capital account; earnings from them are presented under trade in services.Novations
This term defines the reassignment of debt (for balance of payments, usually foreign debt) of public corporations to central government following the privatisation of the public corporation. This does not normally change the overall balance of payments situation as the debt is still regarded as a UK liability.
