Agreement of 16 September 2004 between the European Central Bank and the national central banks of the Member States outside the euro area amending the Agreement of 1 September 1998 laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union
Date: 2004-09-16
Institutions: European Central Bank, Non-euro area Member States: Denmark, Greece, Sweden, United Kingdom
Subjects: Denmark, European Central Bank, Sweden, United Kingdom, accession to the European Union, central bank, exchange rate

18.11.2004

EN

Official Journal of the European Union

C 281/3

EUROPEAN CENTRAL BANK

AGREEMENT

of 16 September 2004

between the European Central Bank and the national central banks of the Member States outside
the euro area amending the Agreement of 1 September 1998 laying down the operating proce-
dures for an exchange rate mechanism in stage three of Economic and Monetary Union

(2004/C 281/03)

THE EUROPEAN CENTRAL BANK (ECB) AND THE NATIONAL
CENTRAL BANKS OF THE MEMBER STATES THAT ARE OUTSIDE
THE EURO AREA (HEREINAFTER THE ‘NON-EURO AREA NCBs’),

HAVE AGREED AS FOLLOWS:

Whereas:

Article 1

(1)

(2)

(3)

(4)

in its Resolution of 16 June
The European Council
1997 (1) (hereinafter the Resolution) agreed to set up an
exchange rate mechanism (hereinafter ERM II) when the
third stage of economic and monetary union began on 1
January 1999.

Under the Resolution, ERM II is designed to help to
ensure that non-euro area Member States participating
in ERM II orient their policies to stability, foster conver-
gence and thereby help them in their efforts to adopt
the euro.

The Agreement of 1 September 1998 between the Euro-
pean Central Bank and the national central banks of the
Member States outside the euro area laying down the
operating procedures for an exchange rate mechanism in
stage three of Economic and Monetary Union (2) (herein-
after the Central Bank Agreement) lays down the oper-
ating procedures for ERM II.

It is necessary to replace Article 5 of the Central Bank
Agreement by a new provision in order to take into
account the increased international role of the euro as
one of the major reserve currencies,

(1) OJ C 236, 2.8.1997, p. 5.
(2) OJ C 345, 13.11.1998, p. 6. Agreement as last amended by the

Agreement of 29 April 2004 (OJ C 135, 13.5.2004, p. 3).

Amendment to Article 5 of the Central Bank Agreement

Article 5 of the Central Bank Agreement is replaced by the
following:

‘Procedures for intervention and other transactions

5.1
Prior agreement of the non-euro area NCB issuing
the intervention currency shall be obtained when another
central bank of the European System of Central Banks
intends to use the former's currency in amounts exceeding
mutually agreed limits in connection with all non-compul-
sory intervention, including unilateral intramarginal inter-
vention.

5.2
A non-euro area NCB shall give immediate notifica-
tion to the ECB when it has used the euro in amounts
exceeding mutually agreed limits in connection with all
non-compulsory intervention, including unilateral intramar-
ginal intervention.

Before carrying out transactions other than interven-
5.3
tion which involve at least one non-euro area currency or
the euro and which exceed mutually agreed limits, the
party intending to carry out such transactions shall give
prior notification to the central bank(s) concerned. In such
cases the central banks concerned shall agree on an
approach which minimises potential problems,
including
the possibility of settling the transaction, wholly or in part,
directly between the two central banks.’

C 281/4

EN

Official Journal of the European Union

18.11.2004

Article 2

Final provisions

1.

This Agreement shall enter into force on 1 October 2004.

2.
This Agreement shall be drawn up in English, French and German and duly signed by the parties.
The ECB, which is required to retain the original Agreements, shall send a certified copy of each of the
original Agreements in English, French and German to each euro area and non-euro area NCB.

Done at Frankfurt am Main, 16 September 2004.

For and on behalf of

The European Central Bank

For and on behalf of

Magyar Nemzeti Bank

For and on behalf of

Česká národní banka

For and on behalf of

Central Bank of Malta

For and on behalf of

Danmarks Nationalbank

For and on behalf of

Narodowy Bank Polski

For and on behalf of

Eesti Pank

For and on behalf of

Banka Slovenije

For and on behalf of

Central Bank of Cyprus

For and on behalf of

Národná banka Slovenska

For and on behalf of

Latvijas Banka

For and on behalf of

Sveriges Riksbank

For and on behalf of

Lietuvos bankas

For and on behalf of

The Bank of England