Opinion of the European Central Bank of 2 August 2010 on the minimum reserves framework (CON/2010/60)
Date: 2010-08-02
Institutions: European Central Bank
Subjects: Estonia, foreign-exchange reserves, monetary policy, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 2 August 2010 

on the minimum reserves framework 

(CON/2010/60) 

Introduction and legal basis 

On 23 July 2010 the European Central Bank (ECB) received a request from Eesti Pank for an opinion on 

the  draft  Governor  decrees  amending  the  procedure  for  calculating  and  complying  with  the  reserve 

requirement  and  on  the  complementary  report  on  the  reserve  requirement  calculation  (hereinafter  the 

‘draft decrees’). 

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 decrees relates to 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 decrees 

The  purpose  of  the  draft  decrees  is  to  smooth  the  transition  from  the  minimum  reserve  framework  in 

Estonia to the Eurosystem minimum reserve system in relation to the introduction of the euro in Estonia 
on  1  January  20112.  First,  the  draft  decrees  provide  for  a  gradual  decrease  in  the  minimum  reserve 

requirement at 11% on 1 September 2010 and 7% on 1 November 2010. Second, reporting on the reserve 

requirement  calculation  is  extended  to  meet  the  reporting  requirements  based  on  the  Eurosystem 

minimum reserve framework. 

2. 

General observations 

2.1   The  ECB  has  addressed  Estonia’s  minimum  reserve  system  on  two  occasions3.  In  both  cases,  it 

noted that differences between the Estonian and the Eurosystem’s minimum reserve systems would 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42.  
As decided at a meeting of the Economic and Financial Affairs Council on 13 July 2010. 
See  Opinions  CON/2006/3  and  CON/2006/59.  All  ECB  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 

 
 
 
 
 
                                                 
need to be eliminated on adoption of the euro. Member States that have not adopted the euro retain 

their powers in the field of monetary policy, for which they remain responsible. At the same time, it 

is  beneficial  for  them  to  achieve  consistency  with  the  Eurosystem  operational  framework  for 

monetary  policy  in  due  time  so  that  credit  institutions  in  those  Member  States  can  become 

acquainted with the requirements that will apply to them when the euro is introduced: in the current 

context the single reserve ratio of 2%.  

2.2  Estonia  will  be  subject  from  1  January  2011  to  the  following  minimum  reserves  framework: 

1) Article 19 of the Statute of the European System of Central Banks and of the European Central 

Bank; 2) Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of 
minimum reserves by the European Central Bank4; 3) Regulation ECB/2003/9; and 4) in relation to 

the definition and calculation of the reserve base, Regulation ECB/2008/32 of 19 December 2008 
concerning the balance sheet of the monetary financial institutions sector (recast)5. Article 11 and 

Annex  III  to  Regulation  ECB/2008/32  require  the  use  of  the  statistical  information  by  credit 

institutions reported under this Regulation for the purpose of minimum reserves. Special rules set 

out  in  this  Regulation  prevail  over  Regulation  ECB/2003/9  and  concern  small  credit  institutions, 

group reporting and reserve requirements in the case of mergers. 

2.3  The  aim  of  the  transitional  regime  foreseen  by  the  draft  decrees  is  to  contribute  to  the  efficient 

functioning  of  the  financial  markets  and  a  smooth  adjustment  of  liquidity  management.  In  this 

respect, it is helpful to ensure an adequate notice period before the application of the measures to 

allow  credit  institutions  to  adjust  to  the  changes  introduced  by  the  draft  decrees.  It  must  also  be 

stressed that these transitional measures will only apply until 31 December 2010 following which 

Estonia will adopt the euro. In this regard, it is noted that in the interests of legal clarity, the draft 

decrees should specify their expiry dates.  

2.4 

It  is  also  noted  that  the  Decree  on  the  complementary  report  could  be  clearer  in  setting 

requirements only for transitional reporting. It should also avoid any risk of confusion that could 

arise from Article 3 which concerns the minimum reserve ratio based on Regulation ECB/2003/9 of 
12 September 2003 on the application of minimum reserves6. The current wording of this Article 

may be read as implying that the Eurosystem minimum reserve ratio applies on entry into force of 

these draft decrees. 

4  
5  
6  

OJ L 318, 27.11.1998, p. 1. 
OJ L 15, 20.1.2009, p. 14. 
OJ L 250, 2.10.2003, p. 10.  

2 

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

Done at Frankfurt am Main, 2 August 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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