EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 2 July 2013   
on reserve requirements  in connection with the introduction of the euro  
(CON/201 3/47) 
 
Introduction and legal basis  
On 21 May  2013, the European Central Bank (ECB) received a request from Latvijas Banka  for an 
opinion on  (a) a draft regulation amending the Regulation on calculating and fulfilling  the minimum 
reserve requirements for credit institutions  (hereinafter the ‘draft amending regulation’),  (b) a draft 
regulation on the prepar ation of  the calculat ion of the reserve base and reserve requirement  for credit 
unions ( hereinafter the ‘draft regulation  on credit unions ’), and (c) a draft regulation on the preparation of  
the calculation of the reserve base and reserve requirement  (hereinafter the ‘draft re gulation  on minimum 
reserves ’) (hereinafter collectively referred to as the ‘draft regulation s’). 
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 C ouncil 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 regulation s relate to instruments of monetary policy . 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 regulation s 
The draft amending regulation provide s for a transitional period for credit institutions by e xtending the 
last reserve maintenance period prior to the introduction of the euro in Latvia and by introducing a new 
calculation of minimum reserves , based on that used for  the Eurosystem ’s minimum reserve system.  
The draft regulation on credit unions int roduce s transitional provisions for calculating the reserve base  of 
credit unions  and lays down the reserve requirements for the initial maintenance periods  following the 
date of the introduction of the euro  in Latvia . 
The draft regulation  on minimum reser ves will repeal both  of the above mentioned regulations, resulting 
in a single regulation  that consolidates Latvian law on reserve requirements . It will enter into force  on the 
date when the Council of the European Union has abrogated the derogation granted  to Latvia  pursuant to 
Article 140(2) of the Treaty . 
 
                                                 
1  OJ L 189, 3.7.1998, p.  42.  
ECB -PUBLIC  
2 2. General observations  
2.1 The ECB welcomes the changes to Latvian law that will be brought about under the draft 
regulations as part of the preparations for the introduction  of the euro in Latvia. Wit hin the 
framework of monetary policy, which remains a competence of Latvijas Banka until the 
introduction  of the euro, the draft regulations will align  the current Latvian minimum reserve 
system with the Eurosystem standards that will apply after the intro duction of the euro2, a 
necessary step identified in previous ECB opinions on Latvijas Banka’s reserve requirements . 
2.2 The ECB considers that the provisions  prepar ing for the application of reserve requirements to 
credit unions  are timely and appropriate . This temporary legislation should help Latvian institutions 
to familiar ise themselves  with the Eurosystem’s requirements and ensure a smooth transition to 
compl iance  with the Eurosystem minimum reserve system from  the date of abrogation of Latvia’s 
derog ation.  Once Latvia introduces the euro,  the draft regulation  on minimum reserves  will apply  
with the result that  minimum reserves will be calculated and notified in line with Regulation 
ECB/2003/9  of the European Central Bank on the application of minimum reserves3. 
2.3 Once  the Council decides to abrogate Latvia’s  derogation4, the ECB may, in the coming months , 
decide to  introduce  specific arrangements for the transitional period  as institutions in Latvia  
become  subject to the ECB’s minimum reserve  system . It is envisaged that these arrangements  will, 
inter alia , establish both a transitional maintenance period for institutions located in Latvia and 
transitional provisions for other euro area institutions subject to  reserve requirements  in relation to 
their liabilities towards such Latvian institutions . 
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 2 July 2013 . 
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
2  With respect to the  ECB ’s comments o n the current Latvian minimum reserve system , see ECB Opinions CON/2006/11, 
CON/2008/8 9, CON/2010/18, CON/2010/77 and CON/2012/16 . All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
3  OJ L 250, 2.10.2003, p.  10. 
4  This is expected with effect from  1 January 2014.