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)(1), in conjunction with point (13) of Annex III to that Guideline; (1)  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).’;"

(2) Article 9 is replaced by the following: ‘Article 9 Remuneration (*2)  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

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

(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).