2000/825/EC: Decision of the European Central Bank of 3 November 1998 as amended by Decision of 14 December 2000 on the allocation of monetary income of the national central banks of participating Member States and losses of the ECB for the financial years 1999 to 2001 (ECB/2000/19)
Date: 1998-11-03
Institutions: European Central Bank
Subjects: EU Member State, European Central Bank, central bank, financial loss, income

30.12.2000

EN

Official Journal of the European Communities

L 336/119

DECISION OF THE EUROPEAN CENTRAL BANK

of 3 November 1998

as amended by Decision of 14 December 2000

on the allocation of monetary income of the national central banks of participating Member States
and losses of the ECB for the financial years 1999 to 2001

(ECB/2000/19)

(2000/825/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 and the fifth
paragraph of Article 34.2 thereof,

limits for the legal-tender status of banknotes denomi-
nated in a national currency unit. Such national bank-
notes are issued by the participating NCBs. Banknotes
denominated in euro will only be put into circulation on
1 January 2002. During the transitional period the
ESCB's monetary policy function is unlikely to have any
impact on banknotes in circulation.
material

Whereas:

(1)

(2)

(3)

(4)

(5)

liabilities to credit

According to Article 32.2 of the Statute, the amount of
monetary income of each participating national central
bank (NCB) shall be equal to its annual income derived
from its assets held against notes in circulation and
institutions. According to
deposit
Article 32.3 of the Statute, if the balance-sheet structures
of participating NCBs after the start of the third stage do
not permit the application of the method foreseen in
Article 32.2 of the Statute for the allocation of monetary
income of participating NCBs, the Governing Council
may temporarily adopt an alternative method.

According to Article 32.4 of the Statute, the amount of
each participating NCB's monetary income shall be
reduced by an amount equivalent to any interest paid by
that NCB on its deposit liabilities to credit institutions in
accordance with Article 19 of the Statute. According to
Article 32.5 of the Statute, the sum of the participating
NCBs' monetary income shall be allocated to the partici-
pating NCBs in proportion to their paid-up shares in the
capital of the ECB.

According to Articles 32.6 and 32.7 of the Statute, it is
for the Governing Council of the ECB to arrange for the
clearing and settlement at
the balances
arising from the allocation of monetary income and to
take all other measures necessary for the application of
Article 32 of the Statute.

the ECB of

the Statute stipulates that

Article 10.3 of
for any
decision taken under Article 32 of the Statute, the votes
of the Governing Council of the ECB shall be weighted
according to the NCBs' shares in the subscribed capital
of the ECB.

Council Regulation (EC) No 974/98 of 3 May 1998 on
the introduction of the euro (1), in particular Articles 1,
9 and 10 thereof, has provided for a continuation,
during the transitional period (i.e. the period between 1
January 1999 and 31 December 2001), of the territorial

(6)

The introduction of the euro in Greece on 1 January
2001 has entailed the need for adapting numerous ECB
legal acts and also this Decision. This Decision should
consequently enter into force on the abovementioned
date,

HAS DECIDED AS FOLLOWS:

Article 1

Definitions

For the purposes of this Decision:

— ‘equivalent claims’ shall mean the claims of the participating
NCBs against the ECB arising from the transfer of foreign-
reserve assets from the NCBs to the ECB under Article 30
of the Statute,

— ‘euro area financial sector counterparties’ shall mean (i)
credit institutions as defined in Article 1(1) of Directive
2000/12/EC of the European Parliament and of the Council
of 20 March 2000 relating to the taking up and pursuit of
the business of credit institutions (2), other than partici-
pating NCBs, the registered or head office of which is
located in a participating Member State; and (ii) branches of
credit institutions, as defined in Article 1(3) of Directive
2000/12/EC in a participating Member State, which have
neither their registered nor their head office in a partici-
pating Member State,

— ‘HBS’ shall mean the harmonised balance sheet as struc-
tured in Annex IX of Guideline ECB/2000/18 of 1
December 1998 on the legal framework of accounting and
reporting in the European System of Central Banks (3), as
amended on 15 December 1999 and on 14 December
2000,

— ‘liability base’ shall be the amount of qualifying liabilities,
within the balance sheet of each participating NCB, speci-
fied in accordance with the Annex to this Decision,

(1) OJ L 139, 11.5.1998, p. 1.

(2) OJ L 126, 26.5.2000, p. 1.
(3) Not yet published in the Official Journal.

L 336/120

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Official Journal of the European Communities

30.12.2000

— ‘participating NCB’ shall mean a national central bank of a
Member State which has adopted the single currency in
accordance with the Treaty establishing the European
Community,

— ‘reference rate’ shall be the latest available interest rate used
by the ESCB in its main refinancing operations under para-
graph 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),

— ‘transitional period’, shall mean the period between 1

January 1999 and 31 December 2001.

Article 2

Method for measuring monetary income

1.
During the transitional period, the amount of each partic-
ipating NCB's monetary income shall be determined in accord-
ance with the following formula:

MI = [LB × RR]

where:

— MI is the amount of each participating NCB's monetary

income to be pooled,

— LB is the liability base of each participating NCB, and
— RR is the reference rate.

2.
The amount of each participating NCB's monetary
income shall be reduced by an amount equivalent to any
interest paid on liabilities included within the liability base.

Article 3

Calculation and allocation of monetary income

1.
The calculation of each participating NCB's monetary
income shall be effected by the ECB on a daily basis. The
calculation shall be based on accounting data reported by
participating NCBs to the ECB under Guideline ECB/2000/18.

2.
The sum of each participating NCB's monetary income
shall be allocated to the participating NCBs in proportion to
their paid-up shares in the capital of the ECB. Such allocation
of monetary income shall take place at the end of each finan-
cial year. The ECB shall inform the NCBs of the cumulative
amounts on a quarterly basis.

3.
The amount of monetary income to be allocated to each
participating NCB shall be adjusted in accordance with any
decision by the Governing Council of the ECB made in relation
to the second paragraph of Article 32.4 of the Statute.

4.
The amount of monetary income to be allocated to each
participating NCB shall be offset against the amounts due by
the same participating NCB as calculated in accordance with
Article 2. The net balances arising from the allocation of
monetary income shall be settled at the ECB.

Article 4

Transitional direct charge on income accruing to partici-
pating NCBs from national banknotes in circulation

1.
There shall be a charge on income accruing to each
participating NCB from assets held against national banknotes
in circulation (NCB's seigniorage). Such charge shall give the
ECB the right to access an NCB's seigniorage with the exclusive
purpose of covering those losses of the ECB that cannot be
funded during the financial years 1999, 2000 and 2001 either
(i) in the manner outlined under Article 33.2 of the Statute; or
(ii) against that portion of the equivalent claims which can be
partially offset against foreign-exchange losses under the Guide-
line ECB/2000/15 of 3 November 1998 as amended by the
Guideline of 16 November 2000 on the composition, valuation
and modalities for the initial transfer of foreign reserve assets,
and the denomination and remuneration of
equivalent
claims (2).

The Governing Council of

in addition to
2.
approving the annual accounts of the ECB each financial year,
shall decide the amount of the charge and establish the modali-
ties for settlement of unfunded losses.

the ECB,

The amount of the charge shall have a maximum upper
3.
limit equivalent to the increase in the total monetary income of
the ESCB that would have arisen if banknotes denominated in
national currency units had been included in the liability base.
The amount of the charge of each participating NCB shall be in
proportion to its key for subscription to the capital of the ECB.
This limit shall be reduced to the extent necessary to ensure
that no participating NCB shall be liable for more than the total
of its seigniorage income from national banknotes in circula-
tion for the relevant financial year. For the purposes of this
paragraph, national seigniorage shall be calculated by applying
the reference rate to the amount of national banknotes in
circulation.

Article 5

Final provisions

This Decision, as amended by Decision ECB/2000/NP17, shall
enter into force on 1 January 2001.

This Decision applies to the financial years of 1999, 2000 and
2001.

Done in Frankfurt am Main on 3 November 1998, and
amended and approved for publication in the Official Journal of
the European Communities on 14 December 2000.

The President of the ECB

Willem F. DUISENBERG

(1) OJ L 310, 11.12.2000, p. 1.

(2) See page 114 of this Official Journal.

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Official Journal of the European Communities

L 336/121

ANNEX

COMPOSITION OF THE LIABILITY BASE

A. The liability base shall

include, with the exclusion of any other item:

1. Liabilities to euro area financial sector counterparties denominated in euro,

including:

(a) current accounts (item 2.1 of the HBS);

(b) reserve requirements under Article 19.1 of the Statute (item 2.1 of the HBS);

(c) amounts in deposit under the ESCB deposit facility (item 2.2 of the HBS);

(d) fixed-term deposits (item 2.3 of the HBS);

(e) deposits related to margin calls arising from ESCB monetary policy operations (item 2.5 of the HBS);

(f) liabilities arising from liquidity-absorbing repurchase operations (reserve repos) under Chapter 3.1 of Annex I
to Guideline ECB/2000/7 of 31 August 2000 on monetary policy instruments and procedures of
the
Eurosystem (1).

2. Liabilities of participating NCBs arising from the issuance to the ECB of promissory notes in connection with the
issuance by the ECB of debt certificates under Chapter 3.3 of Annex I to Guideline ECB/2000/7 (item 10.2 of the
HBS).

B. The amount of each participating NCB's liability base shall be calculated in accordance with the harmonised
accounting principles and rules established in Guideline ECB/2000/18 of 1 December 1998 on the legal framework of
accounting and reporting in the European System of Central Banks as amended on 15 December 1999 and on 14
December 2000 (2).

(1) OJ L 310, 11.12.2000, p. 1.
(2) Not yet published in the Official Journal