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Minimum reserves

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Minimum reserves



Council Regulation (EC) No 2531/98 — application of minimum reserves by the European Central Bank

Regulation (EC) No 1745/2003 of the European Central Bank on the application of minimum reserves


  • The Council regulation and the European Central Bank (ECB) regulation set out the rules for the minimum reserve system in the euro area; these require credit institutions established in the euro area to hold deposits on accounts with their national central bank. These are called minimum reserves.
  • Regulation (EC) No 2531/98 defines the basis for minimum reserves and the maximum permissible ratios between those reserves and their basis.
  • The ECB may adopt regulations or decisions in this area. On this basis, in its Regulation (EC) No 1745/2003, the ECB specifies:
    • the institutions that are subject to the minimum reserve requirements;
    • the composition of the reserve base;
    • the actual reserve ratios;
    • the calculation and maintenance of the minimum reserves;
    • the exemptions; and
    • the reporting and verification rules.


Institutions subject to minimum reserve requirements

  • The legislation concerns credit institutions established in the euro area and branches in the euro area of credit institutions established outside the euro area.
  • The ECB publishes a list of the institutions subject to minimum reserve requirements.

Maintenance periods

  • The institutions must maintain the required minimum reserves over an average period of 6 weeks, known as a maintenance period.
  • To help institutions prepare their reserve management, the ECB publishes a calendar of the maintenance periods.

Averaging provision

An institution complies with its reserve requirement if, over the maintenance period, the average daily balances on its reserve account are not less than its reserve requirement. This means that the institution’s capital may fluctuate freely around its reserve requirement, but the average assets of the current account must be at least equal to the reserve requirement over the entire maintenance period.

Calculation of minimum reserves

To determine the amount of the minimum reserves of each institution, its reserve base is multiplied by a reserve ratio. Institutions can deduct a uniform lump-sum allowance of the amount of €100,000 from their reserve requirement.

Reserve base

The reserve base is defined in relation to the institution’s balance sheet before the start of the maintenance period. It is composed of different categories of the institution’s liabilities, e.g. deposits and debt securities.

Reserve ratio

The ECB defines the reserve ratios that apply to the relevant liabilities in the reserve base. It may set reserve ratios between 0 % and 10 %. There may be different reserve ratios for specific liability categories (e.g. deposits with agreed maturity over 2 years or deposits redeemable at notice over 2 years). In January 2012, the reserve ratio that applies to most of the short-term liabilities on the institutions’ balance sheet was set at 1 %.


To ensure that the minimum reserve requirement is not burdensome and does not hinder the efficient allocation of resources, the national central banks in the euro area pay interest to the institutions on the capital of their minimum reserves.


An institution may be exempted from meeting the minimum reserve requirements if:

  • its banking licence is withdrawn or renounced;
  • a judicial authority or another competent authority decides to submit it to winding-up proceedings;
  • it is subject to reorganisation measures;
  • it is subject to the freezing of funds and/or to other measures that restrict the use of its funds or its access to open market operations or to the standing facilities (monetary policy operations) of the Eurosystem;
  • the purpose of the minimum reserve system would not be met by imposing reserve requirements on the institution.

Collection and verification of information

  • The ECB has the right to collect from the institutions the information required to establish the minimum reserves.
  • The ECB may also verify the accuracy and quality of the information which the institutions provide to demonstrate compliance with the minimum reserve requirements.


The ECB may impose sanctions on an institution that fails to hold all or part of its required minimum reserves.


  • Regulation (EC) No 2531/98 has applied since 1 January 1999, except its Article 5 (power of adopting regulations or decisions) which has applied since 27 November 1998.
  • Regulation (EC) No 1745/2003 has applied since 24 January 2004 except its Article 5 (calculation and notification of minimum reserves) which has applied since 10 March 2004.


  • Minimum reserves represent one of the monetary policy instruments available to the Eurosystem.
    • Their first key function is to stabilise money market interest rates, which is achieved by the averaging provision. They allow credit institutions to handle daily liquidity fluctuations, e.g. those arising from fluctuations in the demand for banknotes.
    • A second important function is the enlargement of the structural liquidity shortage of the banking system.
    • The need for credit institutions to hold reserves with the national central banks contributes to increasing the demand for central bank credit, making it easier for the ECB to steer money market rates through regular liquidity-providing operations.
  • For more information, see ‘Minimum reserves’ on the ECB website.


Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves by the European Central Bank (OJ L 318, 27.11.1998, pp. 1-3)

Successive amendments to Regulation (EC) No 2531/98 have been incorporated in the original text. This consolidated version is of documentary value only.

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, pp. 10-16)

See consolidated version.


Consolidated version of the Treaty on the Functioning of the European Union — Protocol (No 4) on the statute of the European System of Central Banks and of the European Central Bank (OJ C 202, 7.6.2016, pp. 230-250)

Regulation (EU) No 1071/2013 of the European Central Bank of 24 September 2013 concerning the balance sheet of the monetary financial institutions sector (recast) (ECB/2013/33) (OJ L 297, 7.11.2013, pp. 1-50)

See consolidated version.

last update 27.02.2017