PRESS RELEASE

Minimum reserve system revision of the standardised deduction from the reserve base

2 December 1999

In the minimum reserve system of the Eurosystem, the liabilities which a credit institution owes to other institutions subject to this system (the "interbank liabilities") are excluded from the reserve base. The general criterion for the application of this provision is that credit institutions have to provide evidence of their interbank liabilities. However, if a credit institution cannot provide evidence of its interbank liabilities in the form of debt securities issued with an agreed maturity of up to two years or money market paper, the European Central Bank (ECB) allows the institution to apply a standardised deduction to the aforementioned liabilities (see Article 3.2 of the Regulation (EC) No. 2818/98 of the European Central Bank of 1 December 1998 on the application of minimum reserves (ECB/1998/15)).

At its meeting on 2 December 1999 the Governing Council of the ECB decided, after a review of new statistical evidence available, to increase from 10% to 30% the standardised deduction from the reserve base to be applied to debt securities issued with an agreed maturity of up to two years and money market paper. This decision shall have effect as from the determination of the reserve requirement to be fulfilled in the maintenance period starting on 24 January 2000.

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