Opinion of the European Central Bank of 1 August 2007 at the request of Banca Naţională a României on a draft circular on the minimum reserves regime (CON/2007/22)
Date: 2007-08-01
Institutions: European Central Bank
Subjects: Romania, foreign-exchange reserves, monetary policy, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 1 August 2007 

at the request of Banca Naţională a României 

on a draft circular on the minimum reserves regime 

(CON/2007/22) 

Introduction and legal basis 

On 5 July 2007 the European Central Bank (ECB) received a request from Banca Naţională a României 

for  an  opinion  on  a  draft  circular  amending  and  the  supplementing  Regulation  No  6/2002  on  the 

minimum reserves regime (hereinafter ‘draft circular’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European  Community  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 circular relates to minimum reserves requirements, and the authorities of Member States other 

than participating Member States are obliged to consult the ECB on any draft legislative provisions on the 

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 circular 

1.1  The main purpose of the draft circular is to align the minimum reserves regime in Romania with the 

corresponding standards of the Eurosystem concerning the minimum reserve base. To this end, the 

draft circular amends the definition of the liability elements included in the minimum reserve base. 

In  particular,  it  excludes  the  amounts  in  transit  from  the  minimum  reserves  base.  Moreover,  the 

amounts  in  transit  are  also  excluded  from  the  calculation  of  the  average  rate  of  the  sight  deposit 

interest,  reported  by  the  credit  institutions  for  the  establishment  of  the  interest  rate  paid  for  the 

minimum reserves. 

1.2 

In  addition,  the  draft  circular  introduces  changes  regarding  building  societies.  It  introduces  a  0% 
minimum reserves ratio for such credit institutions2. 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
Article 288 of Government Emergency Ordinance No 99 of 6 December 2006 on credit institutions and capital adequacy 
published in Monitorul Oficial al României, Part I, No 1027 of 27 December 2006 defines building societies as follows: 
‘Romanian  legal  persons,  as  credit  institutions  specialised  in  long-term  financing  for  housing,  which  have  as  their 
primary activity collective savings and lending for housing.’ 

 
 
 
 
                                                 
2. 

General observations  

2.1  The ECB notes that, although non-participating Member States retain their powers in the field of 

monetary  policy,  it  is  nevertheless  beneficial  to  gradually  achieve  consistency  with  Eurosystem 

standards  so  that  credit  institutions  operating  in  their  territory  can  become  acquainted  with  the 

minimum reserve requirements that will apply once the respective Member States have joined the 

euro area. The legal framework underlying the Eurosystem’s minimum reserve system is laid down 

in: (i) Article 19 of the Statute of the European System of Central Banks and the European Central 

Bank;  and  (ii)  Council  Regulation  (EC)  No  2531/98  of  23  November  1998  concerning  the 
application of minimum reserves by the European Central Bank3; and (iii) Regulation ECB/2003/9 
of 12 September 2003 on the application of minimum reserves4; and (iv) relating to the definition 

and calculation of the reserve base, Regulation ECB/2001/13 of 22 November 2001 concerning the 
consolidated balance sheet of the monetary financial institutions sector5. The purpose of these legal 

acts, which are directly applicable to and binding on euro area credit institutions, is to ensure that 

the terms and conditions for the Eurosystem’s minimum reserve system are uniform throughout the 

euro area. 

2.2 

In the course of preparing for the introduction of the euro in Romania, Banca Naţională a României 

will  need  to  examine  whether  the  Eurosystem’s  requirements  can  be  fulfilled  effectively  and 

whether the necessary measures have been adopted in Romania to ensure that the authorities have 

the  requisite  powers,  under  Romanian  law,  to  assist  and  cooperate  with  the  ECB  to  collect  and 

verify the information necessary for the Eurosystem’s minimum reserve system.  

3. 

Concept of minimum reserves  

3.1  The ECB welcomes the provisions of the draft circular which narrow the minimum reserve base as 

it  contributes  to  aligning  Romanian  minimum  reserves  regime  with  that  of  the  Eurosystem. 

Article 3  of  the  Regulation  ECB/2003/9  does  not  include  amounts  in  transit  in  the  reserve  base 

when determining the liabilities comprising an institution's reserve base. 

3.2   However,  the  ECB  observes  that  the  general  Romanian  framework  for  the  minimum  reserves 

requirements  still  significantly  differs  from  that  of  the  Eurosystem  (e.g.  the  calculation  of  the 

reserve base in correlation with the residual maturity; indirect holdings for minimum reserves not 

generally admitted; specific definition of credit institutions for the purpose of minimum reserves; 

differentiation between ratios applied to holdings in national and foreign currencies; definitions of 
reference and maintenance periods according to previous Eurosystem standards)6. Differences from 

the legal framework under which the Eurosystem operates will have to be eliminated on adoption 

of the euro by Romania. 

3  
4  
5  
6  

OJ L 318, 27.11.1998, p. 1. 
OJ L 250, 2.10.2003, p. 10.  
OJ L 333, 17.12.2001, p. 1. Regulation as last amended by Regulation ECB/2006/20 (OJ L 2, 5.1.2007, p. 3). 
Please note that some aspects of the Eurosystem framework were changed in March 2004. 

2 

 
 
                                                 
4.  

The 0% minimum reserve ratio for building societies 

4.1  The draft circular introduces a 0% minimum reserve ratio for building societies. This amendment 

would further widen the divergence between the Romanian and the Eurosystem’s minimum reserve 

frameworks, at least with respect to their holdings with a maturity of less than two years. Indeed, 

according to Article 2 of Regulation ECB/2003/9, all credit institutions in the euro area are subject 

to  a  minimum  reserve  requirement  and  the  Romanian  regime  also  explicitly  defines  building 
societies  as  credit  institutions  for  statistical  reporting  and  minimum  reserve  obligations7.  For  the 

Eurosystem, Article 2(2) of the Regulation only admits exceptions to the minimum reserve system 

on  a  non-discriminatory  basis  for:  ‘(a) 

institutions  subject 

to  reorganisation  measures; 

(b) institutions for which the purpose of the ECB’s minimum reserve system would not be met by 

imposing reserve requirements upon them. In reaching a decision on any such exemption, the ECB 

shall take into account one or more of the following criteria: (i) the institution is pursuing special-

purpose functions; (ii) the institution is not exercising active banking functions in competition with 

other credit institutions; (iii) the institution has all its deposits earmarked for purposes relating to 

regional  and/or  international  development  assistance’.  This  means  that  under  the  Eurosystem’s 

regime  there  can  only  be  exemptions  by  decision  on  a  case-by-case  basis  for  individual  credit 

institutions  based  on  a  thorough  analysis  of  their  specific  situation.  The  foreseen  automatic 

application of a 0% minimum reserve ratio for all building societies in Romania leads to a de facto 

exemption of this category of credit institutions from minimum reserve requirements, which would 

not  meet  the  abovementioned  Eurosystem’s  exemption  criteria.  As  such  treatment  also  differs 

considerably from the Eurosystem's regime, it would have to be re-adjusted upon the introduction 
of the euro at the latest8. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 1 August 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

7  

8  

See Section 1 Article 1 of Regulation No 6 of 24 July 2002 of Banca Naţională a României on the minimum reserves 
regime. 
See  ECB  Opinion  CON/2006/11  of  23  February  2006  at  the  request  of  Latvijas  Banka  on  draft  amendments  to  the 
Regulation on calculating and fulfilling the minimum reserve requirements for banks and ECB Opinion CON/2006/59 of 
14 December 2006 at the request of Eesti Pank on a draft decree establishing a procedure to calculate and comply with 
reserve requirements. 

3