EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 21 December 2012  
on the reserve requirements for credit institutions 
(CON/2012/110) 
 
Introduction and legal basis 
On 4 December 2012, the European Central Bank (E CB) received a request from Lietuvos bankas for an 
opinion on a draft resolution amending the Rules on reserve requirements for credit institutions 
(hereinafter the ‘draft resolution’). 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and Article 2(2)  of Council Decision 98/415/EC of 29 June 1998 on 
the consultation of the European Central Bank by  national authorities regarding draft legislative 
provisions1, as the draft resolution relates to instruments concerning  monetary policy of a non-euro area 
Member State. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 
European Central Bank, the Governing Council has adopted this opinion. 
 1.  Purpose of the draft resolution 
1.1 The draft resolution aims: (a) to amend the fo rmula for calculating the remuneration of credit 
institutions’ holdings of required reserves in order to  reflect the current factual situation in the euro 
area money market, where financial instruments with  perceived low credit risk are traded at close 
to 0 % or even negative yields, and link the remunera tion rate to the ECB deposit facility rate rather 
than the ECB rate for the main refinancing opera tions, and (b) to reduce the reserve ratio from 4 % 
to 3 % for the liabilities included in the reserve ba se. As an exception to the normal reserve ratio, 
deposits with an agreed maturity period of over two years, deposits redeemable at a notice period 
of over two years, debt securities issued with an original maturity of over two years and repurchase 
agreements continue to be subject to a reserve ratio of 0 %. 
1.2 The new reserve requirements are to apply fro m the maintenance period starting on 24 January 
2013. 
 2. Aligning the minimum reserves reg ime with Eurosystem standards 
The ECB notes that, although Member States that have not adopted the euro retain competence in the 
field of monetary policy, it is nevertheless beneficial  for them to achieve consistency with Eurosystem 
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
ECB-PUBLIC  
2 standards so that credit institutions in those Memb er States can become familiar with the reserve 
requirements that will apply to them once the eu ro is introduced. In ECB Opinions CON/2005/8 and 
CON/2008/66 on the Lithuanian minimum reserves regime2, the ECB emphasised in particular the need 
for further alignment of the Lithuanian minimum reserves regime with Eurosystem standards. In 
particular, the ECB made the point that Lithuanian  credit unions should also be subject to reserve 
requirements3. Consequently, it should be noted that the comments that the ECB has made on previous 
occasions concerning the Lithuanian minimum reserves regime remain valid. 
 3. Basis for the remuneration The ECB notes that the holdings of required reserves will be remunerated not by reference to the ECB 
rate for the main refinancing operations, as stipulat ed in Article 8 of Regulation (EC) No 1745/2003 of 
the European Central Bank of 12 Septembe r 2003 on the application of minimum reserves 
(ECB/2003/9)
4, but by reference instead to the ECB deposit facility rate. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 21 December 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
2  All ECB opinions are available on th e ECB’s website at www.ecb.europa.eu. 
3 See in particular paragraph 14 of Opinion CON/2005/8 in wh ich the ECB stressed that Lith uanian credit unions fall under 
the definition of a credit institution within the meaning of the Consolidated Banking Directive, and will therefore be 
subject to the Eurosystem reserve requi rements when Lithuania adopts the euro. 
4  OJ L 250, 2.10.2003, p. 10.