2001D0914 — EN — 01.01.2004 — 001.001 — 1
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►B DECISION OFTHE EUROPEAN CENTRAL BANK
of 6 December 2001
ontheallocation ofmonetary income ofthenationalcentral banksof participating Member States
from the financial year 2002
(ECB/2001/16)
(2001/914/EC)
(OJ L 337, 20.12.2001, p. 55)
Amended by:
Official Journal
No page date
►M1Decision ECB/2003/22 of the European Central Bank of 18 December
2003L 9 39 15.1.2004
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DECISION OFTHE EUROPEAN CENTRAL BANK
of 6 December 2001
on the allocation of monetary income of the national central banks
of participating Member States from the financial year 2002
(ECB/2001/16)
(2001/914/EC)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Statute of the European System of Central Banks
and of the European Central Bank (hereinafter referred to as the‘Statute’), and in particular to Article 32 thereof,
Whereas:
(1)According to Article 32.1 of the Statute, monetary income is the
income accruing to the national central banks (NCBs) in theperformance of the monetary policy function. Under the provi-sions of Article 32.2 of the Statute, the amount of each NCB's
monetary income shall be equal to its annual income derived
from its assets held against notes in circulation and depositliabilities to credit institutions. These assets are to be earmarkedby NCBs in accordance with the guidelines of the GoverningCouncil. As from the financial year 2003, NCBs should earmarkthe assets ensuing from the performance of the monetary policy
function as assets held against the notes in circulation and
deposit liabilities to credit institutions. According to Article32.4 of the Statute, the amount of each NCB's monetary incomeshall be reduced by an amount equivalent to any interest paid bythat NCB on its deposit liabilities to credit institutions in accor-
dance with Article 19 of the Statute.
(2)Pursuant to Article 32.5 of the Statute, the sum of the monetary
income of the NCBs shall be allocated to them in proportion totheir paid-up shares in the capital of the European Central Bank
(ECB).
(3)According to Article 32.6 and Article 32.7 of the Statute, the
Governing Council of the ECB is empowered to establish guide-lines for the clearing and settlement by the ECB of the balances
arising from the allocation of monetary income and to take all
other measures necessary for the application of Article 32 ofthe Statute.
(4)Pursuant to Article 10 of Council Regulation (EC) 974/98 of 3
May 1998 on the introduction of the euro (1), from 1 January
2002, the ECB and the NCBs (hereinafter referred to as the‘Eurosystem’) shall put into circulation banknotes denominatedin euro. Article 15 of this Regulation provides for the continua-tion of the legal tender status of banknotes denominated innational currency units during a maximum period of six months
after the end of the transitional period. The year 2002 should
thus be regarded as a special year, since banknotes in circulationdenominated in national currency units may still account for aconsiderable proportion of the total value of Eurosystem bank-notes in circulation and with different patterns in Member
States. This situation is comparable to the situation from 1999
to 2001 and, therefore, for the financial year 2002 monetaryincome should be calculated by a method analogous to thatprovided for in Decision ECB/2000/19 of 3 November 1998 asamended by Decision of 14 December 2000 on the allocationof monetary income of the national central banks of participating
Member States and losses of the ECB for the financial years
1999 to 2001 (
2) in order to ensure that changes in the patterns
of banknotes circulation do not significantly affect the relative2001D0914 — EN — 01.01.2004 — 001.001 — 2
(1) OJ L 139, 11.5.1998, p. 1.
(2) OJ L 336, 30.12.2000, p. 119.
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income positions of NCBs. For 2002, Article 32.3 of the Statute
allows the Governing Council to decide, by way of derogationfrom Article 32.2, that monetary income be measured according
to an alternative method.
(5)Article 9(1) of Guideline ECB/2001/1 of 10 January 2001
adopting certain provisions on the 2002 cash changeover (1)
provides that euro banknotes frontloaded to credit institutions or
to their appointed agents shall be debited in their respectiveaccounts with the NCBs, as the case may be, for their face value,according to the following ‘linear debiting model’: one third ofthe frontloaded sum on 2 January 2002, one third on 23 January2002, and the last third on 30 January 2002. The calculation of
monetary income for the year 2002 needs to take account of this
‘linear debiting model’.
(6)This Decision is related to Decision ECB/2001/15 of 6
December 2001 on the issue of euro banknotes (2) that provides
that the ECB and the NCBs shall issue euro banknotes. DecisionECB/2001/15 establishes the allocation of euro banknotes incirculation to the NCBs in proportion to their paid-up shares inthe capital of the ECB. The same Decision allocates to the ECB8 % of the total value of euro banknotes in circulation. The allo-
cation of euro banknotes among Eurosystem members gives rise
to intra-Eurosystem balances. The remuneration of these intra-Eurosystem balances on euro banknotes in circulation has adirect effect on the income of each Eurosystem member, andtherefore it should be regulated under this Decision. The income
accruing to the ECB on the remuneration of its intra-Eurosystem
claims on NCBs related to its share of euro banknotes in circula-tion should in principle be distributed to the NCBs in accordancewith the decisions of the Governing Council, in proportion totheir shares in the subscribed capital key in the same financialyear it accrues.
(7)The net balance of the intra-Eurosystem claims and liabilities oneuro banknotes in circulation should be remunerated by applyingan objective criterion defining the cost of money. In this context,
the main refinancing operations rate used by the Eurosystem in
its tenders for main refinancing operations is regarded as appro-priate.
(8)The net intra-Eurosystem liabilities on euro banknotes in circula-
tion should be included in the liability base for the purposes of
the calculation of the NCBs monetary income under Article 32.2of the Statute as they are equivalent to banknotes in circulation.The settlement of interest on intra-Eurosystem balances on eurobanknotes in circulation will therefore result in the distribution
of a substantial amount of the Eurosystem's monetary income
among NCBs in proportion to their paid-up shares in the capitalof the ECB. These intra-Eurosystem balances should be adjustedto allow for a gradual adaptation of the NCBs' balance sheetsand profit and loss accounts. The adjustments should be basedon the value of banknotes in circulation of each NCB during a
period prior to the introduction of euro banknotes. These adjust-
ments should take account of the special circumstances of theyear 2002, during which Member States have different change-over scenarios, and during which credit institutions willincrease to different levels their normal cash holdings, andshould apply on a yearly basis in accordance with a fixed
formula for no more than five years thereafter.
(9)The adjustments to the intra-Eurosystem balances on euro bank-
notes in circulation have been calculated in order to compensate
for any significant changes in the NCBs' income positions as a
consequence of the introduction of the euro banknotes and thesubsequent allocation of monetary income. The Governing2001D0914 — EN — 01.01.2004 — 001.001 — 3
(1) OJ L 55, 24.2.2001, p. 80.
(2) See page 52 of this Official Journal.
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Council has therefore decided not to have recourse to the dero-
gation from Article 32 of the Statute, allowed by Article 51 ofthe Statute.
(10)The adjustments to the intra-Eurosystem balances on euro bank-
notes in circulation need to take account of the special situation
of the Grand Duchy of Luxembourg arising from its recentmonetary history.
(11)The Governing Council of the ECB has adopted this Decisionwith the expectation that its economic results and the financialequilibrium that such economic results entail remain unchangedduring the period of application of Article 4 of this Decisionand, therefore, it is the firm commitment of the Governing
Council of the ECB to ensure the maintenance of the regime
provided for by this Decision until 31 December 2007,
HAS DECIDED AS FOLLOWS:
Article 1
Definitions
For the purposes of this Decision:
(a) ‘participating Member States’ shall mean the Member States which
have adopted the single currency in accordance with the Treaty
establishing the European Community';
(b) ‘NCBs’ shall mean the national central banks of the participating
Member States;
(c) ‘liability base’ shall be the amount of qualifying liabilities, within
the balance sheet of each NCB, specified in accordance with Annex
I to this Decision;
(d) ‘earmarkable assets’ shall be the amount of assets held against the
liability base, within the balance sheet of each NCB, specified in
accordance with Annex II to this Decision;
(e) ‘intra-Eurosystem balances on euro banknotes in circulation’ shall
mean the claims and liabilities arising between a NCB and theECB and between a NCB and the other NCBs as a result of theapplication of Article 4 of Decision ECB/2001/15 of 6 December2001 on the issue of euro banknotes;
(f) ‘subscribed capital key’ shall mean the NCBs' shares (expressed as
percentages) in the ECB's subscribed capital that result fromapplying to the NCBs the weightings in the key referred to inArticle 29.1 of the Statute and as applicable for the relevant finan-cial year;
(g) ‘credit institutions’ shall mean credit institutions subject to
minimum reserve requirements under Regulation ECB/1998/15 (
1)
on the application of minimum reserves, as amended by RegulationECB/2000/8 (
2);
(h) ‘HBS’ shall mean the harmonised balance sheet as structured in
Annex IX to the Guideline ECB/2000/18 on the legal frameworkof accounting and reporting in the European System of CentralBanks as amended on 15 December 1999 and 14 December2000 (
3);2001D0914 — EN — 01.01.2004 — 001.001 — 4
(1) OJ L 356, 30.12.1998, p. 1.
(2) OJ L 229, 9.9.2000, p. 34.
(3) OJ L 33, 2.2.2001, p. 21.▼M1
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(i) ‘reference rate’ shall be the latest available marginal interest rate
used by the Eurosystem in its tenders for main refinancing opera-tions under paragraph 3.1.2 of Annex I to Guideline ECB/2000/7 of
31 August 2000 on monetary policy instruments and procedures of
the Eurosystem (
1). Where more than one main refinancing opera-
tion is conducted for settlement on the same day, a simpleaverage of the marginal rates of the operations conducted inparallel is used.
Article 2
Intra-Eurosystem balances on euro banknotes in circulation
1. The intra-Eurosystem balances on euro banknotes in circulation
shall be calculated on a monthly basis and shall be recorded in thebooks of the ECB and the NCBs on the first business day of the monthwith a value date of the last business day of the preceding month.
The first calculation of the intra-Eurosystem balances on euro bank-
notes in circulation under the previous paragraph shall be made forfrontloaded euro banknotes on 2 January 2002 with a value date of 1
January 2002.
The intra-Eurosystem balances on euro banknotes in circulation shall,
for the period from 1 January until 31 January of the first year witheffect from which each quinquennial adjustment pursuant to Article29.3 of the Statute applies, be calculated on the basis of the adjusted
subscribed capital key applied to balances on the total euro banknotes
in circulation on 31 December of the previous year.
2. The intra-Eurosystem balances on euro banknotes in circulation,
including those resulting from the application of Article 4 of this Deci-sion, shall be remunerated at the reference rate.
3. The remuneration referred to in the previous paragraph shall be
settled by Target payments on a quarterly basis.
4. In derogation from the previous paragraph, for the financial year
2002, the remuneration referred to in paragraph 2 shall be settled at theend of the year.
Article 3
Method for measuring monetary income
1. In 2002, the amount of each NCB's monetary income shall be
determined in accordance with the following formula:
MI = LB × RR,
whereby:
MI is the amount of each NCB's monetary income to be pooled,
LB is the liability base of each NCB,RR is the reference rate.
2. From 2003 the amount of each NCB's monetary income shall be
determined by measuring the actual income that derives from theearmarkable assets recorded in its books. As an exception thereof,
gold shall be considered to generate no income.
3. Where the value of a NCB's earmarkable assets exceeds or falls
short of the value of its liability base, the difference shall be offset byapplying to the value of the difference the average rate of return on the
earmarkable assets of all NCBs taken together.
This average rate of return shall be calculated in the following manner.
The total income accrued by all NCBs on their earmarkable assets,2001D0914 — EN — 01.01.2004 — 001.001 — 5
(1) OJ L 310, 11.12.2000, p. 1.▼M1
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excluding all income arising from net intra-Eurosystem claims resulting
from TARGET transactions (Annex II, A.3) and net intra-Eurosystemclaims on euro banknotes in circulation including those resulting from
the application of Article 4 (Annex II, A.4), shall be divided by the
average amount of the total earmarkable assets of the Eurosystem.The average rate of return shall be applied on a 360 days basis.
Article 4
Adjustments to intra-Eurosystem balances
1. For the purposes of monetary income calculation, each NCB's
intra-Eurosystem balances on euro banknotes in circulation shall be
adjusted by a compensatory amount determined in accordance with
the following formula:
CA = (K - A) × C,whereby:CA is the compensatory amount,
K is the amount for each NCB that results from the application of
the subscribed capital key to the average value of banknotes incirculation during the period 1 July 1999 to 30 June 2001,
A is the average value for each NCB of banknotes in circulation
during the period 1 July 1999 to 30 June 2001,
C is the following coefficient for each financial year:
Financial year Coefficient
2002 1
2003 0,86067352004 0,70134722005 0,53348352006 0,3598237
2007 0,1817225
2. The sum of the compensatory amounts of the NCBs shall be 0.
3. The compensatory amounts and the accounting entries to balance
those compensatory amounts shall be recorded on separate intra-Euro-system accounts in the books of each NCB with a value date of 1January on the first business day of each year. The accounting entriesto balance the compensatory amounts shall not be remunerated.
4. In the event that the value of euro banknotes that the Banque
centrale du Luxembourg puts into circulation in 2002 exceeds theaverage value of its banknotes in circulation during the period from 1July 1999 to 30 June 2001 by 25 % or more, letter ‘A’ in the formulaof paragraph 1 shall be for the Banque centrale du Luxembourg thevalue of banknotes put into circulation by the Banque centrale du
Luxembourg in 2002 upto a maximum limit of EUR 2,2 billion.
Upon application of this derogation, all compensatory amounts calcu-lated on the basis of Article 4(1) shall be subject to retroactiveadjustments at the end of 2002, in order to ensure compliance withparagraph 2. Such retroactive adjustments shall be in proportion to the
subscribed capital key.
5. In derogation from paragraph 1, upon the occurrence of specific
contingencies relative to changes in patterns of banknote circulation asdescribed in Annex III to this Decision, each NCB's intra-Eurosystembalances on euro banknotes in circulation shall be adjusted in accor-dance with the provisions set out in that Annex.2001D0914 — EN — 01.01.2004 — 001.001 — 6
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6. The adjustments to intra-Eurosystem balances provided for in this
Article shall cease to apply from 1 January 2008.
Article 5
Calculation and allocation of monetary income
1. The calculation of each NCB's monetary income shall be effected
by the ECB on a daily basis. The calculation shall be based on
accounting data reported by NCBs to the ECB. The ECB shall inform
the NCBs of the cumulative amounts on a quarterly basis.
2. The amount of each NCB's monetary income shall be reduced by
an amount equivalent to any interest accrued or paid on liabilitiesincluded within the liability base, and in accordance with any decisionof the Governing Council of the ECB under the second paragraph ofArticle 32.4 of the Statute.
3. The allocation of the sum of each NCB's monetary income in
proportion to the subscribed capital key shall take place at the end of
each financial year.
Article 6
Final provisions
1. This Decision shall enter into force on 1 January 2002.2. This Decision shall be published in the Official Journal of the
European Communities .2001D0914 — EN — 01.01.2004 — 001.001 — 7
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ANNEXI
COMPOSITION OFTHE LIABILITY BASE
A. The liability base shall include, with the exclusion of any other item:
1. banknotes in circulation
In the financial year 2002, for the purposes of this Annex and for each
NCB, ‘banknotes in circulation’:
(i) shall also include banknotes issued by it and denominated in its
national currency unit; and
(ii) shall be reduced by the value of the non-remunerated loans related to
frontloaded euro banknotes that have not been yet debited (part of
asset item 6 of the harmonised balance sheet (HBS)).
From the financial year 2003, for the purposes of this Annex and for each
NCB, ‘banknotes in circulation’ shall include banknotes denominated in
euro, to the exclusion of any other banknotes;
2. liabilities to euro area credit institutions related to monetary policy opera-
tions denominated in euro, including:
(a) current accounts including minimum reserve requirements under
Article 19.1 of the Statute (liability item 2.1 of the HBS);
(b) amounts in deposit under the Eurosystem deposit facility (liability
item 2.2 of the HBS);
(c) fixed-term deposits (liability item 2.3 of the HBS);
(d) liabilities arising from fine-tuning reverse operations (liability item
2.4 of the HBS);
(e) deposits related to margin calls (liability item 2.5 of the HBS);
3. intra-Eurosystem liabilities of NCBs arising from the issue to the ECB of
promissory notes backing the issuance of ECB debt certificates under
Chapter 3.3 of Annex I to Guideline ECB/2000/7 (liability item 10.2 of
the HBS);
4. net intra-Eurosystem liabilities resulting from TARGET transactions (part
of liability item 10.3 of the HBS);
5. net intra-Eurosystem liabilities on euro banknotes in circulation, including
those resulting from the application of Article 4 of this Decision.
B. The amount of each NCB's liability base shall be calculated in accordance
with the harmonised accounting principles and rules established in Guideline
ECB/2000/18 on the legal framework of accounting and reporting in the
European System of Central Banks as amended on 15 December 1999 and
14 December 2000.(1)2001D0914 — EN — 01.01.2004 — 001.001 — 8
(1) OJ L 33, 2.2.2001, p. 21.
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ANNEXII
EARMARKABLE ASSETS
A. Earmarkable assets shall include, with the exclusion of any other item:
1. lending to euro area credit institutions related to monetary policy opera-
tions denominated in euro (asset item 5 of the harmonised balance sheet
(HBS));
2. intra-Eurosystem claims equivalent to the transfer of foreign reserve
assets other than gold to the ECB under Article 30 of the Statute (part
of asset item 9.2 of the HBS);
3. net intra-Eurosystem claims resulting from TARGET transactions (part of
asset item 9.4 of the HBS);
4. net intra Eurosystem claims on euro banknotes in circulation including
those resulting from the application of Article 4 of this Decision;
5. gold, including claims in respect of gold transferred to the ECB, in an
amount permitting each NCB to earmark a proportion of its gold that
corresponds to the application of its share in the subscribed capital key
to the total amount of gold earmarked by all NCBs. (asset item 1 and
part of asset item 9.2 of the HBS).
For the purposes of this Decision, and at least until the calculation of
monetary income for the financial year 2007, gold shall be valued on
the basis of the gold price in euro per fine ounce as at 31 December
2002.
B. The value of each NCB's earmarkable assets shall be calculated in accor-
dance with the harmonised accounting principles and rules established in
Guideline ECB/2000/18 on the legal framework of accounting and reporting
in the European System of Central Banks as amended on 15 December 1999
and 14 December 2000(1).2001D0914 — EN — 01.01.2004 — 001.001 — 9
(1) OJ L 33, 2.2.2001, p. 21.
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ANNEXIII
SPECIAL CONTINGENT ADJUSTMENTS
A. First contingent adjustment
In the event that the total average of banknotes in circulation in 2002 is
lower than the total average of banknotes, denominated in the national
currency of the Member States that have adopted the euro, in the period of
1 July 1999 to 30 June 2001, the coefficient ‘C’ applying to the financial
year 2002 in accordance with Article 4(1) shall be reduced with retroactive
effect in the same proportion as the decrease in the total average of bank-
notes in circulation.
The reduction shall not result in a coefficient lower than 0,8606735. Upon
application of this derogation, one quarter of the resulting reduction to the
NCBs compensatory amounts ‘CA’ applicable in the year 2002 shall be
added to each of the NCBs compensatory amounts applicable in 2004,
2005, 2006, and 2007 under Article 4(1).
B. Second contingent adjustment
In the event that those NCBs for which the compensatory amount referred to
in Article 4(1) is a positive figure, pay net remuneration on intra-Eurosystem
balances on banknotes in circulation that, when added to the item ‘net result
of pooling of monetary income’ in their profit and loss account at the end of
the year, results in a net expense, the coefficient ‘C’ applying to the finan-
cial year 2002 in accordance with Article 4(1) shall be reduced to the extent
necessary to eliminate this condition.
The reduction shall not result in a coefficient lower than 0,8606735. Upon
application of this derogation, one quarter of the resulting reduction to the
NCBs compensatory amounts ‘CA’ applicable in the year 2002 shall be
added to each of the NCBs compensatory amounts applicable in 2004,
2005, 2006, and 2007 under Article 4(1).2001D0914 — EN — 01.01.2004 — 001.001 — 10