Circular Letter No. CC/2025/00000035

Sent to:
Credit Institutions, Electronic Money Institutions Mod. 99999924/T – 01/14

Subject: Base for the Calculation of Minimum Reserves

From 1 February 2022, the new system for reporting statistical information to the Bank of Portugal came into force, within the scope of Monetary and Financial Statistics and Minimum Reserves, in accordance with Bank of Portugal Instruction No. 14/2021, published on 18 November 2021 in the Official Bulletin of the Bank of Portugal No. 11/2021, Supplement.

Additionally, also effective from 1 February 2022, the "R - Minimum Reserves" framework annexed to this Circular Letter has been maintained, which serves for verification of the base for the calculation of minimum reserves.

No changes have been introduced in the determination of the base for incidence, maintaining the allocation of the liabilities that constitute it for the calculation of its value in accordance with the provisions of Article 5 of European Central Bank Regulation (EU) 2021/378 of 22 January 2021¹, regarding the application of minimum reserve requirements (ECB/2021/1).

For its part, European Central Bank Regulation (EU) 2021/379 of 22 January 2021, regarding the balance sheet items of credit institutions and the monetary financial institutions sector (ECB/2021/2), establishes the statistical reporting requirements².

The BANK OF PORTUGAL, through the Statistics Department and the Markets Department, informs that institutions subject to the minimum reserve regime, for the calculation of the values of the "R - Minimum Reserves" framework, based on the "A - Statistical Balance Sheet by Country and Currency" framework, of the Monetary and Financial Statistics (MFS)³, must take into account the provisions of this Circular Letter.

Representing by A(m,n,P,M), the values included in framework A regarding liabilities to residents in country P, regardless of the currency M in which such liabilities are denominated; and by R(m,n), the values of framework R, by substituting the pair (m,n) with the numbers assigned to the (row, column) of the respective framework, it is recommended that the information sent to the Bank of Portugal reflect the indications set out below:

1. Total base for incidence (after application of the standard deduction in force)⁴ [cell R(20,20)]

Under the provisions of paragraph 1 of Article 5 of the aforementioned Regulation (EU) 2021/378, institutions calculate their total base for incidence by using the statistical information reported in accordance with Regulation (EU) 2021/379, whose amount is given by:

[Formula Image/Placeholder]

1. JO L 73 of 3/3/2021, p. 1
2. JO L 73 of 03/03/2021, p. 16
3. Instruction No. 14/2021, BO No. 11/2021, 18.11.2021.
4. See point 3.2.

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2. Liabilities included in the total base for incidence that require the maintenance of reserves (after application of the standard deduction in force)² [cell R(30,20)]

According to point (b) of paragraph 1 of Article 6 of Regulation (EU) 2021/378, the amount of liabilities included in the base for incidence that require the maintenance of reserves with a coefficient of 1% is given by:

[Formula Image/Placeholder]

Where D is the amount calculated according to the provisions of point 3, to be deducted from the base for incidence, for the purposes of calculating minimum reserves.

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3. Amount to be deducted from the base for incidence

For the purposes of calculating minimum reserves, in accordance with the provisions of paragraph 2 of Article 5 of Regulation (EU) 2021/378, liabilities in securities issued by themselves, with maturities up to 2 years, which are in the possession of Euro Area Central Banks, the ECB, or institutions subject and not exempt from the minimum reserve requirements of the Eurosystem, may be excluded from their base for incidence, however, reporting institutions of these liabilities must be able to prove them, in accordance with point 3.1 of this Circular Letter.

If there is no reporting of these liabilities, the standard deduction defined by the ECB applies, in accordance with the aforementioned articles, in conformity with point 3.2 of this Circular Letter.

3.1. Filling in cell R(10,10), with waiver of the standard deduction defined by the ECB

As established by the ECB in point (b) of paragraph 3 of Article 5 of Regulation (EU) 2021/378, institutions wishing to waive the ECB's standard deduction fill in cell R(10,10) of framework R with the amount of liabilities included in lines A.L51 and A.L52 of framework A, indicating the nature of the securities and respective amounts held by each duly identified institution, by completing a supporting declaration, in accordance with the attached model. This information will be sent to the Bank of Portugal – Markets Department, by letter or email (ecms-pt@bportugal.pt), within the deadline set for sending framework A⁵.

When cell R(10,10) is filled with a value higher than that resulting from the application of the standard deduction defined by the ECB, calculated in accordance with the formula indicated in point 3.2, and after verification, in accordance with the provisions of the previous paragraph, that value will be assumed as a deduction from the base for incidence for the calculation of reserves, therefore:

D = R(10,10)

3.2. Standard deduction defined by the ECB

As established by the ECB in paragraph 4 of Article 5 of Regulation (EU) 2021/378, referred to above, the amount of the standard deduction from the base for incidence for the calculation of minimum reserves must be determined based on a coefficient, calculated according to the following formula:

[Formula Image/Placeholder]

The standard deduction from the base for incidence for the calculation of minimum reserves will be applied in cases where cell R(10,10) is not filled in, or if filled in, contains a value lower than that resulting from the formula indicated here.

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4. Minimum reserves [cell R(40,20)]

Taking into account the form indicated in points 1, 2 and 3, the amount of minimum reserves, after deducting the fixed deduction in accordance with the provisions of paragraph 4 of Article 5 of Regulation (EU) 2021/378, is the value (non-negative) obtained by applying the formula:

R(30,20) x 1% - 100 000.

Thus, the value calculated for cell R(40,20) of the "R - Minimum Reserves" framework must be:

[Formula Image/Placeholder]

Where "LI" is the Exemption Threshold (fixed deduction to be subtracted from the amount of minimum reserves) and "Coef" is the positive minimum reserve coefficient defined by the Eurosystem.

5. Final indications

This Circular Letter applies to the base for incidence values to be reported regarding 31 December 2025, for both institutions that are part of the monthly regime and for institutions that are part of the quarterly regime.

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As usual, the Statistics Department and the Markets Department will provide the necessary clarifications.

ANNEXES:

• Framework R - Minimum Reserves; and
• Model of supporting declaration of issued debt securities.

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Annex to Circular Letter No. CC/2025/00000035
Issued Debt Securities
(Paragraph 2 of Article 5 of European Central Bank Regulation (EU) 2021/378 regarding the application of minimum reserve requirements)

Reporting institution code: |__| | | |
Reporting institution name:

Holder institution code	Name of the institution holding the securities issued by the reporting institution

Values in millions of euros

Example of issued debt securities⁵	ISIN Code⁶	Contractual term of the security (in months)	Issue Value	Value of securities held
Commercial paper	………..
Bonds	………..
Other debt securities	.……….

⁶ Only debt securities issued with an initial maturity not exceeding 2 years.
⁷ ISIN (International Security Identification Number) fill in only if available.

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Annex to Circular Letter No. CC/2025/00000035
Framework R - Minimum Reserves
Values in millions of euros

	Monetary Union Central Banks (including the ECB) and other entities subject to the minimum reserve regime	Non-sectorized
	S403000	S3
	Y10	10 20
Securities except capital, up to two years (1)	T S I 820 C P Z 17 P M X R 10
Total base for incidence (2)	T S I 920 C P Z P M X R 20
Of which: subject to the positive coefficient defined by the Eurosystem (2)	T S I 930 C P Z P M X R 30
Minimum reserves (3)	T S I 940 C P Z P M X R 40

(1) To be filled in only if the institution chooses to present proof of the amount of securities issued by itself that are actually in the possession of Monetary Union Central Banks, the ECB, or other entities subject to the minimum reserve regime and not exempt from its compliance, in order to exclude them from the base for incidence of minimum reserves, thereby waiving the standard deduction defined by the ECB (as per Art. 5, paragraphs 2 and 3, of European Central Bank Regulation (EU) No. 2021/378 of 22/01/2021 regarding the application of minimum reserve requirements). In this case, this cell must be filled in with the amount of securities to be deducted from the base for incidence, and it is strictly necessary to present proof of this amount by sending to the Bank of Portugal, Markets Department, the documents referred to in point 3 of this Circular.

(2) Values calculated applying the standard deduction in force or the amounts presented in framework R, if the institution has chosen to present proof of the amount of securities issued by itself that are in the possession of Monetary Union Central Banks, the ECB, or other entities subject to the minimum reserve regime and not exempt from its compliance.