Circular BCL 2006/198 of 7 August 2006 — Adoption of the euro by Slovenia

Luxembourg, 7 August 2006
To all credit institutions

CIRCULAR BCL 2006/198
Adoption of the euro by Slovenia

Ladies and Gentlemen,

At the European Council meeting held in Brussels on 16 June 2006, the Heads of State and Government of the European Union decided that, with effect from 1 January 2007, Slovenia would adopt the single currency, the euro.

The purpose of this circular is to describe the impact of Slovenia's adoption of the euro on the preparation of monthly and quarterly statistical reports.

1. Impact on statistical data collection by the BCL

Slovenia's accession to the euro area with effect from 1 January 2007 will have an impact not only on the preparation of monthly and quarterly statistical reports but also on the calculation of the minimum reserves to which credit institutions are subject.

1.1 Impact on monthly statistical data collection

The monthly statistical reports S 1.1 "Monthly balance sheet", S 1.4 "Adjustments related to valuation effects" and S 1.5 "Information on interest rates in EUR" require amounts to be broken down by the country of residence or registered office of the counterparty, i.e., the country in which the centre of economic interest of the counterparty in question is located, distinguishing between the following three breakdowns:

• Luxembourg (LU)
• Other Member States of the Monetary Union (Other MSUM)
• Rest of the world: i.e., countries that do not fall into the two categories mentioned above

With effect from 1 January 2007, the category "Other Member States of the Monetary Union" (Other MSUM) will also include Slovenia, which currently, and until 31 December 2006 inclusive, falls under the category "Rest of the world".

Furthermore, credit institutions are reminded that the inclusion of Slovenia under the category "Other countries members of the Monetary Union" implies a more detailed sectoral breakdown of assets and liabilities towards counterparties residing in Slovenia. The details of this sectoral breakdown can be consulted in Part III – S 1.1 "Monthly balance sheet" (pp. 5 to 15), Part III – S 1.4 "Adjustments related to valuation effects" (pp. 5 to 14) as well as Part III – S 1.5 "Information on interest rates in EUR" (pp. 7 to 9) of the Collection of Instructions to Banks.

Credit institutions are therefore invited to modify their reporting systems to include assets and liabilities towards a counterparty residing in Slovenia under the category "Other Member States of the Monetary Union" while ensuring that the appropriate sectoral breakdown is carried out.

1.2 Impact on report S 2.5 "Quarterly balance sheet"

The quarterly statistical report S 2.5 "Quarterly balance sheet" requires amounts to be broken down by the country of residence or registered office of the counterparty, identifying the country in question by a two-character ISO code.

In this context, credit institutions are also reminded that Slovenia's accession to the Monetary Union implies a much more detailed sectoral breakdown of assets and liabilities towards Slovenian residents. The details of this sectoral breakdown can be consulted in Part III – S 2.5 "Quarterly balance sheet" (pp. 5 to 16) of the Collection of Instructions to Banks.

2. Repeal of Circular 2002/177

In this context, we also wish to inform credit institutions of the abolition of Circular BCL 2002/177 regarding the country and currency codes to be used by credit institutions.

Credit institutions are invited to consult the lists of country and currency codes published on the website of the International Standardisation Organisation (ISO) to become familiar with the codes to be used. In the event of doubt regarding a country and/or currency code, the BCL stands at the disposal of credit institutions to provide the necessary information.

The aforementioned list of country codes has been supplemented by the BCL with the country codes indicated in the following table. Similarly, the BCL also specifies the possible codes from ISO standard n°3166 that should not be used.

Additional country codes to the ISO list used by the BCL:
XA European Central Bank – Frankfurt
XB International organisations headquartered abroad excluding organisations of the European Union XC International organisations headquartered in Luxembourg, excluding organisations of the European Union XD Organisations of the European Union headquartered in Luxembourg XG Organisations of the European Union headquartered abroad (excluding the European Central Bank - Frankfurt - code: XA) XX Undetermined country code (the use of this code will result in a request for clarification from the BCL to the reporter)

Although included in the ISO list, the following country code is not used by the BCL:
FX Metropolitan France

3. Impact on the calculation of minimum reserves

Since exposures to the European Central Bank, the national central banks of the Eurosystem and credit institutions subject to the Eurosystem's minimum reserve system are excluded from the reserve base, it is necessary to reduce the volume of exposures included in the reserve base by exposures to Slovenian credit institutions that are subject to the Eurosystem's minimum reserve system with effect from the reference period of January 2007.

For the maintenance period from 13 December 2006 to 16 January 2007, that from 17 January 2007 to 13 February 2007 and that from 14 February 2007 to 13 March 2007, exposures to Slovenian credit institutions subject to the Eurosystem's minimum reserve system may already be deducted from the reserve base of credit institutions.

Luxembourg credit institutions wishing to take advantage of this possibility must report the table in the annex to the Central Bank of Luxembourg for the months of October 2006, November 2006 and December 2006, considering Slovenian institutions as already subject to the Eurosystem's reserve system. In this case, the amount of the minimum reserve reported on the basis of statistical report S 1.1 "Monthly balance sheet" will be amended taking into account the information provided on the basis of the aforementioned annex.

Reporting credit institutions are reminded that monthly statistical reports S 1.1 and S 1.4 as well as the quarterly report S 2.5 must obviously be completed in such a way as to consider Slovenia as not being included in the Monetary Union until 31 December 2006 inclusive.

4. Quality of transmitted data

The concerned institutions are once again reminded to ensure scrupulous identification of their counterparties and to use, for this purpose, in particular, the official list of credit institutions published by the Commission de Surveillance du Secteur Financier as well as the official list of monetary financial institutions made available to reporting institutions on the website of the European Central Bank.

We therefore consider it necessary to re-emphasise the importance of the quality of data transmitted to the BCL and the need to submit data to detailed verification rules contained in the technical documentation before transmission. Only rigorous control carried out at the time of data production will allow us to meet both quality requirements and time limits. This point is all the more important as the data collected in this way will be checked by the ECB services before being aggregated with data from other Member States. Any significant error or negligence will have damaging repercussions on the reputation of the entire national banking community.

5. Entry into force of the new provisions

The new classification of assets and liabilities towards Slovenian residents is to be carried out for the first time when preparing monthly statistical reports relating to the period of January 2007 as well as when preparing quarterly statistical reports relating to the period of March 2007.

The annexed table relating to the calculation of minimum reserves relates to the periods of October 2006, November 2006 and December 2006.

Please accept, Ladies and Gentlemen, the assurance of our most distinguished sentiments.

CENTRAL BANK OF LUXEMBOURG
The Management

Serge KOLB Andrée BILLON Yves MERSCH

Annex.

Annex. Information to be provided to the Central Bank of Luxembourg for the purpose of reducing the reserve base for the periods of October 2006, November 2006 and December 2006

Rubrique	Devise	Pays	Secteur économique	Echéance initiale <= 2 ans	Echéance initiale > 2 ans	Non ventilé
Dettes à vue	EUR	Slovénie	BCN + EC assujettis
	Autres devises	Slovénie	BCN + EC assujettis
Dettes à préavis	EUR	Slovénie	BCN + EC assujettis
	Autres devises	Slovénie	BCN + EC assujettis
Dettes à terme	EUR	Slovénie	BCN + EC assujettis
	Autres devises	Slovénie	BCN + EC assujettis
Opérations de vente et de rachat fermes	EUR	Slovénie	BCN + EC assujettis
	Autres devises	Slovénie	BCN + EC assujettis
Titres de créances émis	EUR	Slovénie	BCN + EC assujettis
	Autres devises	Slovénie	BCN + EC assujettis

BCN + EC assujettis: Banque centrale nationale de Slovénie et établissements de crédit assujettis au système de réserves obligatoires de l'Eurosystème

The wording of the rows and columns of this table corresponds to that used for report S 1.1 to be submitted monthly to the Central Bank of Luxembourg. The credit institutions concerned can therefore base themselves on the definitions in the Collection of Instructions to Banks to complete this table.