Frontloading of euro banknotes to central banks outside the euro area
Further to the press release issued by the European Central Bank (ECB) on 14 December 2000, when the decision of the Governing Council of the ECB regarding the distribution of frontloaded euro banknotes outside the euro area was announced, the Governing Council agreed on the frontloading of euro banknotes to central banks outside the euro area. This constitutes an additional measure which will contribute towards a smooth cash changeover in 2002.
The Governing Council has agreed, in particular, that national central banks (NCBs) of participating Member States may frontload central banks of the non-participating Member States, of the accession countries as well as of other countries in accordance with the following principles which will be laid down in legal documentation concluded between a frontloading NCB and frontloaded central banks outside the euro area:
- Frontloading of central banks outside the euro area would only be allowed as from 1 December 2001;
- Frontloaded central banks outside the euro area would have to settle the payment for the frontloaded amounts on the first business day of 2002;
- In order to cover credit risks, frontloaded central banks outside the euro area would be required to provide the euro area NCB with collateral from the moment of frontloading and for the amounts frontloaded; and
- Central banks outside the euro area would have to provide assurances that subsequent sub-frontloading of credit institutions by them would be carried out in accordance with the rules laid down in the above-mentioned legal documentation.