Date: 2023-09-01Category: Not ApplicableState: Union GovernmentCountry: Europe
Regulation (EU) 2023/1679 of the European Central Bank of 25 August 2023 amending Regulation (EU) 2021/378 on the application of minimum reserve requirements (ECB/2021/1) (ECB/2023/21)
Executive Summary:
This regulation, issued by the European Central Bank (ECB), amends Regulation (EU) 2021/378 regarding minimum reserve requirements. The key change is setting the remuneration of minimum reserves at 0%. This regulation takes effect on September 20, 2023, the first day of the sixth maintenance period in 2023.
Key Points / Main Content:
Amendments to Regulation (EU) 2021/378:
* Article 2, point 13 is replaced with a revised definition of "TARGET business day," referencing Guideline (EU) 2022/912.
* Article 9 is replaced entirely.
Remuneration of Minimum Reserves (Article 9):
* Holdings of minimum reserves in reserve accounts will be remunerated at 0%.
* Remuneration, if any, will be paid on the second TARGET business day following the end of the maintenance period.
* Funds excluded from minimum reserves under Article 31d will be remunerated according to rules for non-monetary policy deposits in Guideline (EU) 2019/671, effective from the date Article 31d's condition applies.
Final Provisions:
* The regulation enters into force five days after publication in the Official Journal of the European Union.
* The regulation applies from September 20, 2023.
Impact Analysis:
National Central Banks (NCBs):
* Impact: NCBs are directly responsible for implementing the new remuneration rate of 0% on minimum reserves and for managing remuneration of funds excluded under Article 31d according to Guideline (EU) 2019/671. They also need to adapt to the revised definition of "TARGET business day".
* Action Required: Adjust systems and procedures to reflect the new remuneration rate and the revised definition of "TARGET business day". Implement procedures for handling funds excluded under Article 31d.
Credit Institutions:
* Impact: Credit institutions will no longer receive remuneration on their mandatory minimum reserves held with the Eurosystem.
* Action Required: Adjust financial planning to account for the cessation of remuneration on minimum reserves.
Eurosystem:
* Impact: The Eurosystem's monetary policy implementation will be affected by the change in remuneration, impacting the steering of short-term money market rates and the overall efficiency of monetary policy.
* Action Required: Monitor and assess the impact of the new remuneration policy on money market rates and adjust monetary policy operations as needed.
Key Entities Referenced
European Central Bank: The central bank of the Eurozone.
Governing Council of the European Central Bank: The body responsible for the monetary policy of the Eurozone.
Treaty on the Functioning of the European Union: One of the primary treaties forming the constitutional basis of the European Union.
Statute of the European System of Central Banks and of the European Central Bank: The legal framework governing the European System of Central Banks (ESCB) and the European Central Bank (ECB).
Council Regulation EC No 2531/98: A Council Regulation concerning the application of minimum reserves by the European Central Bank.
Regulation EU 2021/378: Regulation on the application of minimum reserve requirements.
Guideline EU 2022/912: Guideline of the European Central Bank on a new-generation Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET).
Christine Lagarde: The President of the ECB.
L 216/96 EN Official Journal of the European Union 1.9.2023
REGULATION (EU) 2023/1679 OF THE EUROPEAN CENTRAL BANK
of 25 August 2023
amending Regulation (EU) 2021/378 on the application of minimum reserve
requirements (ECB/2021/1)
(ECB/2023/21)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular
Article 19(1) thereof,
Having regard to Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum
reserves by the European Central Bank(1),
Whereas:
(1) Credit institutions’ holdings of minimum reserves, which are required under Regulation (EU) 2021/378 of the
European Central Bank (ECB/2021/1)(2), and reserves held in the deposit facility, are currently remunerated at the
Eurosystem’s deposit facility rate (DFR). In the current conditions of ample liquidity, the interest paid on the reserves
that banks hold in the deposit facility is the main instrument to steer short-term money market rates in line with the
desired monetary policy stance.
(2) On 27 July 2023, the Governing Council of the European Central Bank (ECB) decided to set the remuneration of
minimum reserves at 0 %. The decision of the Governing Council to reduce the remuneration on minimum reserves
ensures the continued effectiveness of monetary policy by preserving the DFR’s anchoring function for money
market rates and thereby maintains the current degree of control over the monetary policy stance. At the same
time, the decision improves the efficiency of monetary policy in the current economic context by reducing the
overall amount of interest that needs to be paid on reserves in order to implement the appropriate monetary policy
stance. This efficiency consideration has become all the more relevant with the increases in the key ECB interest rates.
(3) This Regulation should apply from 20 September 2023, which is the first day of the sixth maintenance period
in 2023.
(4) Therefore, Regulation (EU) 2021/378 (ECB/2021/1) should be amended accordingly,
HAS ADOPTED THIS REGULATION:
Article 1
Amendments
Regulation (EU) 2021/378 (ECB/2021/1) is amended as follows:
(1) in Article 2, point (13) is replaced by the following:
‘“TARGET business day” means “business day” or “TARGET business day” as defined in Article 2(13) of Guideline
(EU) 2022/912 of the European Central Bank (ECB/2022/8) (*), in conjunction with point (13) of Annex III to that
Guideline;
_____________
(*) Guideline (EU) 2022/912 of the European Central Bank of 24 February 2022 on a new-generation Trans-European
Automated Real-time Gross Settlement Express Transfer system (TARGET) and repealing Guideline ECB/2012/27
(ECB/2022/8) (OJ L 163, 17.6.2022, p. 84).’;
(1) OJ L 318, 27.11.1998, p. 1.
(2) Regulation (EU) 2021/378 of the European Central Bank of 22 January 2021 on the application of minimum reserve
requirements (ECB/2021/1) (OJ L 73, 3.3.2021, p. 1).1.9.2023 EN Official Journal of the European Union L 216/97
(2) Article 9 is replaced by the following:
‘Article 9
Remuneration
1. The relevant NCB shall remunerate holdings of minimum reserves in the reserve accounts at 0 %.
2. The relevant NCB shall pay the remuneration, if any, on the holdings of minimum reserves on the second
TARGET business day following the end of the maintenance period over which the remuneration was earned.
3. Funds included in holdings of minimum reserves that are subsequently excluded from those minimum reserves
pursuant to Article 3(1)(d) shall be remunerated by the relevant NCB in accordance with the rules applicable to non-
monetary policy deposits in Guideline (EU) 2019/671 of the European Central Bank (ECB/2019/7) (*), with effect
from the date the specific condition of Article 3(1)(d) applies, as determined by the relevant NCB.
_____________
(*) Guideline (EU) 2019/671 of the European Central Bank of 9 April 2019 on domestic asset and liability
management operations by the national central banks (ECB/2019/7) (OJ L 113, 29.4.2019, p. 11).’.
Article 2
Final provisions
1. This Regulation shall enter into force on the fifth day following that of its publication in the Official Journal of the
European Union.
2. It shall apply from 20 September 2023.
This Regulation shall be binding in its entirety and directly applicable in the Member States in
accordance with the Treaties.
Done at Frankfurt am Main, 25 August 2023.
For the Governing Council of the ECB
The President of the ECB
Christine LAGARDE