Opinion of the European Central Bank of 21 December 2012 on the reserve requirements for credit institutions (CON/2012/110)
Date: 2012-12-21
Institutions: European Central Bank
Subjects: Eurosystem, Lithuania, credit institution, monetary policy, national law, reserves

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 December 2012  

on the reserve requirements for credit institutions 

(CON/2012/110) 

Introduction and legal basis 

On 4 December 2012, the European Central Bank (ECB) received a request from Lietuvos bankas for an 

opinion  on  a  draft  resolution  amending  the  Rules  on  reserve  requirements  for  credit  institutions 

(hereinafter the ‘draft resolution’). 

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 resolution relates to instruments concerning  monetary policy of a non-euro area 

Member  State.  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 resolution 

1.1  The  draft  resolution  aims:  (a)  to  amend  the  formula  for  calculating  the  remuneration  of  credit 

institutions’ holdings of required reserves in order to reflect the current factual situation in the euro 

area money market, where financial instruments with perceived low credit risk are traded at close 

to 0 % or even negative yields, and link the remuneration rate to the ECB deposit facility rate rather 

than the ECB rate for the main refinancing operations, and (b) to reduce the reserve ratio from 4 % 

to 3 % for the liabilities included in the reserve base. As an exception to the normal reserve ratio, 

deposits with an agreed maturity period of over two years, deposits redeemable at a notice period 

of over two years, debt securities issued with an original maturity of over two years and repurchase 

agreements continue to be subject to a reserve ratio of 0 %. 

1.2  The  new  reserve  requirements  are  to  apply  from  the  maintenance  period  starting  on  24  January 

2013. 

2. 

Aligning the minimum reserves regime with Eurosystem standards 

The  ECB  notes  that,  although  Member  States  that  have  not  adopted  the  euro  retain  competence  in  the 

field  of  monetary  policy,  it  is  nevertheless  beneficial  for  them  to  achieve  consistency  with  Eurosystem 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
 
                                                 
ECB-PUBLIC 

standards  so  that  credit  institutions  in  those  Member  States  can  become  familiar  with  the  reserve 

requirements  that  will  apply  to  them  once  the  euro  is  introduced.  In  ECB  Opinions  CON/2005/8  and 
CON/2008/66 on the Lithuanian minimum reserves regime2, the ECB emphasised in particular the need 

for  further  alignment  of  the  Lithuanian  minimum  reserves  regime  with  Eurosystem  standards.  In 

particular,  the  ECB  made  the  point  that  Lithuanian  credit  unions  should  also  be  subject  to  reserve 
requirements3. Consequently, it should be noted that the comments that the ECB has made on previous 

occasions concerning the Lithuanian minimum reserves regime remain valid. 

3. 

Basis for the remuneration 

The ECB notes that the holdings of required reserves will be remunerated not by reference to the ECB 

rate for the main refinancing operations, as stipulated in Article 8 of Regulation (EC) No 1745/2003 of 

the  European  Central  Bank  of  12  September  2003  on  the  application  of  minimum  reserves 
(ECB/2003/9)4, but by reference instead to the ECB deposit facility rate. 

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

Done at Frankfurt am Main, 21 December 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

2  
3 

4  

All ECB opinions are available on the ECB’s website at www.ecb.europa.eu. 
See in particular paragraph 14 of Opinion CON/2005/8 in which the ECB stressed that Lithuanian credit unions fall under 
the  definition  of  a  credit  institution  within  the  meaning  of  the  Consolidated  Banking  Directive,  and  will  therefore  be 
subject to the Eurosystem reserve requirements when Lithuania adopts the euro. 
OJ L 250, 2.10.2003, p. 10. 

2