Opinion of the European Central Bank of 11 June 2014 on remuneration of minimum reserves (CON/2014/42)
Date: 2014-06-11
Institutions: European Central Bank
Subjects: Lithuania, credit institution, foreign-exchange reserves, interest, monetary policy, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 11 June 2014  

on remuneration of minimum reserves 

(CON/2014/42) 

Introduction and legal basis 

On  5  June  2014,  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/EC1,  as  the  draft 

resolution relates to the instruments of 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  Under  the  current  rules,  the  minimum  reserves  held  by  credit  institutions  in  Lietuvos  bankas  are 

remunerated  at  the  ECB  deposit  facility  rate,  and  not  at  the  ECB  rate  for  the  main  refinancing 

operations. 

1.2  Lietuvos bankas wishes to ensure that credit institutions that hold minimum reserves with it are not 

under  an  obligation  to  pay  Lietuvos  bankas  for  their  holdings  in  circumstances  where  a  negative 

deposit facility rate is introduced. Therefore, the main purpose of the draft resolution is to amend 

the  formula  for  calculating  remuneration  on  minimum  reserves  held  by  a  credit  institution  in 

Lietuvos bankas.  

1.3  The  draft  resolution  provides  that  the  reference  rate  for  the  calculation  of  remuneration  on 

minimum  reserves  shall  be  either  the  ECB’s  deposit  facility  rate  or  zero  per  cent,  whichever  is 

higher. 

1.4  The formula reflecting the new calculation of remuneration on minimum reserves will first apply in 

relation to the current Lithuanian minimum reserves maintenance period ending on 23 June 2014. 

1  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
 
                                                 
ECB-PUBLIC 

2. 

General observations 

Member  States  that  have  not  adopted  the  euro  retain  their  monetary  policy  powers,  including  in 

connection  with  their  minimum  reserves  frameworks.  Nevertheless,  it  is  beneficial  for  them  to 

achieve  consistency  with  the  Eurosystem  minimum  reserves  framework  so  that  their  credit 

institutions become acquainted with the reserves requirements that will apply to them following the 
adoption of the euro by the Member State where they are established2.  

3. 

Remuneration of minimum reserves 

The  ECB  noted  in  an  earlier  opinion3  that,  under  the  Lithuanian  minimum  reserves  regime,  the 

holdings  of  required  reserves  are  remunerated  not  by  reference  to  the  ECB  rate  for  the  main 

refinancing operations, as specified in Article 8 of Regulation (EC) No 1745/2003 (ECB/2003/9) of 
the European Central Bank4, but by reference to the ECB deposit facility rate. 

The ECB has no comments on the draft resolution. 

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

Done at Frankfurt am Main, 11 June 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

2  

3  
4  

See  paragraph  2.1  of  Opinion  CON/2013/79.  All  ECB  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 
See paragraph 6 of Opinion CON/2013/79. 
Regulation  (EC)  No  1745/2003  of  the  European  Central  Bank  of  12  September  2003  on  the  application  of  minimum 
reserves (ECB/2003/9) (OJ L 250, 2.10.2003, p. 10). 

2