(1)

The Governing Council carried out a review of the remuneration applied to the deposits held with national central banks of Member States whose currency is the euro (hereinafter ‘NCBs’) and the European Central Bank (ECB) that are not related to the implementation of monetary policy (‘non-monetary policy deposits’). The aim of the review was to avoid potential interference of such deposits with the single monetary policy, while ensuring compliance with the principle of an open market economy and consistency in the treatment of similar deposits within the Eurosystem.

(2)

Following the review, the Governing Council decided that greater transparency of the remuneration of non-monetary policy deposits is necessary. The remuneration rates applicable to these deposits are set out in Guidelines (EU) 2019/671 (ECB/2019/7) (1), (EU) 2024/1211 (ECB/2024/13) (2), (EU) 2022/912 (ECB/2022/8) (3) of the European Central Bank and Decision (EU) 2019/1743 of the European Central Bank (ECB/2019/31) (4). In order to improve transparency, as well as consistency across related legal acts, it is appropriate for remuneration rates to be set out in a comprehensive manner in a single legal act to facilitate communication of the remuneration rates and to allow for future adjustments of those rates.

(3)

The remuneration of non-monetary policy deposits should not contribute to persistently or structurally disturbing the transmission or implementation of monetary policy and should safeguard orderly market functioning and thus limit the scope for large volatility of such deposits.

(4)

The Governing Council set the main remuneration policy rate at euro short-term rate (€STR) minus a spread. The spread is easily adjustable in the event that market conditions change, in order to preserve the effectiveness of monetary policy transmission while minimising the risk of abrupt flows into or out of money markets and allowing for a simple and consistent remuneration framework, with very few exceptions. The Governing Council has set, and will adjust as necessary, the spread to meet the objectives of the remuneration policy and to avoid negative effects on monetary policy implementation or market functioning. The spread is currently set at 20 basis points.

(5)

The Governing Council has determined that certain deviations or exceptions from the main remuneration policy rate are necessary. The ceiling concept should continue to apply for the remuneration of government deposits and certain other non-monetary policy deposits, to allow NCBs to remunerate such deposits at a lower rate than the ceiling where appropriate, taking into account country-specific conditions such as those in the repurchase transactions market. A lower spread than 20 basis points, initially set at zero, should apply in the case of guarantee funds held by European Economic Area financial market infrastructures such as payment systems, central counterparties and central securities depositories, as well as for prefunded accounts held in TARGET, in view of the importance of these holdings for the smooth operation of payment systems and financial stability. Funds that are required to be temporarily deposited with the NCBs or the ECB in relation to financial assistance should continue to be exempt from negative rates.

(6)

The Governing Council has also determined it necessary to provide that, in certain circumstances, granular information regarding non-monetary policy deposits may be requested from NCBs by the ECB and be shared within the ECB and the Eurosystem on a strict need-to-know basis when the ECB determines, on a case-by-case basis, that such information is needed to enable the Eurosystem to assess the potential impact of those deposits on the implementation of monetary policy.

(7)

In order to achieve these objectives and in order to allow NCBs sufficient time to prepare for the application of the new remuneration policy to non-monetary policy deposits, this Decision should apply from 1 December 2024,

(1)

‘deposit’ means a credit balance in euro or in another currency resulting from funds held in an account with an NCB or the ECB or from temporary situations deriving from other services provided by an NCB or the ECB, giving rise to a liability recorded on that NCB’s or the ECB’s balance sheet, and which that NCB or the ECB is required to repay under the applicable contractual or regulatory conditions, including overnight and fixed term deposits;

(2)

‘€STR’ means the euro short-term rate as defined in Article 2(2) of Guideline (EU) 2019/1265 of the European Central Bank (ECB/2019/19) (5) and published by the ECB;

(3)

‘€STR OIS’ means an overnight index swap (OIS) as defined in Article 1(25) of Regulation (EU) No 1333/2014 of the European Central Bank (ECB/2014/48) (6), where the periodic floating interest rate payments refer to €STR as the overnight index rate;

(4)

‘non-monetary policy deposits’ means deposits that are not executed to implement the single monetary policy as decided by the Governing Council and that fall within the scope of one of the following: