Payments and markets glossary
- L/C
- Lamfalussy standards
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See minimum standards of the Lamfalussy report (Lamfalussy standards)
- large-value funds transfer system (wholesale funds transfer system)
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A funds transfer system through which large-value and/or high-priority funds transfers are made between participants in the system for their own account or on behalf of their customers. Although, as a rule, no minimum value is set for payments made in such systems, the average size of such payments is usually relatively large.
- large-value payment
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A payment, generally of a very large amount, which is mainly exchanged between banks or between participants in the financial markets and usually requires urgent and timely settlement.
- lead overseer
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Eurosystem central bank assigned with the primary oversight responsibility on behalf of the Eurosystem.
- legal risk
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The risk of a loss being incurred on account of the unexpected application of a law or regulation, or because a contract cannot be enforced.
- letter of credit (L/C)
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An irrevocable commitment by a bank (the issuing bank) or other issuer made at the request of a customer (the applicant third party) to pay a specified sum of money to a third party upon request, subject to terms and conditions drawn up in accordance with uniform customs and practices.
- limit
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See cap (limit)
- linked trade
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A trade where securities are released for delivery only if they become available from another trade.
- liquidity risk
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The risk that a counterparty will not settle an 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.
- loro account (vostro account)
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In correspondent banking, an account held by one bank on behalf of another bank (the “customer bank”); the customer bank regards this account as its “nostro account”. Antonym: nostro account
- loss-sharing agreement
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An agreement among participants in a clearing or settlement system regarding the allocation of any losses arising from the default of either a participant in the system or the system itself.
- loss-sharing rule
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The rule or formula stipulating the way in which losses arising from the default of either a participant in the system or the system itself are to be shared among the various parties in the event that a loss-sharing agreement is activated.