Circular Letter ST.14-0314 — Adoption of the euro by Lithuania and adjustment of the indicative calendar for reserve maintenance periods (Annex)

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu Ref.: ST.14-0314 Luxembourg, 10 September 2014 Circular Letter To all credit institutions Subject: Adoption of the euro by Lithuania and adjustment of the indicative calendar for reserve maintenance periods

Dear Sirs,

On 23 July 2014, the Council of the European Union formally approved Lithuania's accession to the euro area on 1 January 2015.
The purpose of this circular letter is to describe the impact of Lithuania's adoption of the euro on the preparation of monthly and quarterly statistical reports, as well as the adjustments concerning the indicative calendar for reserve maintenance periods.

1. Impact on statistical data collection by the BCL
   Lithuania's accession to the euro area from 1 January 2015 will have an impact on the preparation of monthly and quarterly statistical reports, as well as on the calculation of mandatory reserves to which credit institutions are subject.

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu

1.1 Impact on monthly statistical data collection
The monthly statistical reports S 1.1 "Monthly statistical balance sheet of credit institutions", S 1.4 "Valuation effects on the balance sheet of credit institutions", S 1.5 "Information on interest rates in EUR" and S 1.8 "Securitisation and other transfers of claims by credit institutions" require a breakdown of amounts 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 the following breakdowns:

• All countries: this class groups all operations regardless of the country of residence or registered office of the counterparty
• Luxembourg (LU)
• Other EMU Member States: i.e. Other Member States of the Monetary Union
• Rest of the world: i.e. countries that do not fall into the "Luxembourg" and "Other EMU Member States" categories
  From 1 January 2015, the category "Other Member States of the Monetary Union" (Other EMU Member States) will henceforth also include Lithuania, which currently, and until 31 December 2014 inclusive, falls under the category "Rest of the world".

1.2 Impact on quarterly statistical data collection
The quarterly statistical report S 2.5 "Quarterly statistical balance sheet of credit institutions" requires a breakdown of amounts by the country of residence or registered office of the counterparty, identifying the country in question by a two-character ISO code. Since the sectoral breakdown is identical for all countries, Lithuania's accession to the euro area has no impact on report S 2.5 "Quarterly statistical balance sheet of credit institutions".

2. Impact on the calculation of mandatory reserves
   Exposures to the European Central Bank, the national central banks (NCBs) members of the Eurosystem and credit institutions (CIs) which

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu are subject to the Eurosystem's mandatory reserve system are excluded from the reserve base. Thus, the volume of exposures included in the reserve base of exposures to Latvian credit institutions subject to the Eurosystem's mandatory reserve system must be reduced from the reference period of January 2015. The volume of exposures included in the reserve base of exposures to the Latvian central bank must also be reduced. For the maintenance period from December 2014 to January 2015 and that from January to March 2015 (the precise start and end dates of the maintenance periods are published on the BCL website), exposures to the Lithuanian national central bank and to Lithuanian credit institutions subject to the Eurosystem's mandatory 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 Banque du Luxembourg for the months of October 2014 and November 2014, considering Lithuanian credit institutions as already subject to the Eurosystem's reserve system. According to the new indicative calendar for reserve maintenance periods (published by the ECB on 17 July 2014 and also available on the BCL website), the monthly data for December 2014 will not be used for the calculation of reserves. Indeed, the Governing Council decided that from January 2015, monetary policy meetings would be held every six weeks, instead of once a month. The new indicative calendar for reserve maintenance periods aligns the start of reserve maintenance periods with the new monetary policy meeting dates, which implies that the monthly data for December 2014, March 2015, June 2015 and September 2015 will no longer be used for the calculation of the reserve base. Note that according to this calendar, the twelfth reserve maintenance period of 2014 will be extended by fourteen days and will end on 27 January 2015.

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu

The amount of the mandatory reserve reported on the basis of the statistical report S 1.1 "Monthly statistical balance sheet of credit institutions" for October and November 2014 may be amended taking into account the information provided on the basis of the aforementioned annex. Credit institutions reporting are reminded that the monthly statistical reports S 1.1, S 1.4, S 1.5, S 1.8 and S 2.5 must obviously be completed in such a way as to consider Lithuania as not being included in the monetary union until 31 December 2014 inclusive.

3. Quality of data transmitted
   The institutions concerned are reminded to ensure scrupulous identification of their counterparties and to use for this purpose, in particular, the official table 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 deem it necessary to re-emphasise the importance of the quality of data transmitted to the BCL and the need to submit data to the detailed verification rules set out in the technical documentation before transmission. Only rigorous control carried out at the time of data production can meet both quality requirements and time limits. This point is all the more important as the data thus collected will be checked by the ECB services before being aggregated with data from other Member States. Any error or negligence will have damaging repercussions on the reputation of the entire national financial community.

4. Entry into force of the new provisions
   The new classification of assets and liabilities towards residents of Lithuania is to be carried out for the first time when preparing the monthly statistical reports relating to the period of January 2015.

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu

The attached table relating to the calculation of mandatory reserves relates to the periods of October and November 2014.

Please accept, Sirs, the assurance of our perfect consideration.
BANQUE CENTRALE DU LUXEMBOURG
Romain Weber Roland Nockels
Head of the Section for Banking and Monetary Statistics Head of the Statistics Department
Annex: 1

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4943 E-mail: reporting.banques@bcl.lu

Annex. Information to be provided to the Banque du Luxembourg for the reduction of the reserve base for the periods of October and November 2014

Item	Country	Currency	Economic Sector	Initial Maturity <= 2 years	> 2 years	Unallocated
Demand liabilities	Lithuania	EUR	NCB + CIs subject to reserves
	Lithuania	Other currencies	NCB + CIs subject to reserves
Time deposits	Lithuania	EUR	NCB + CIs subject to reserves
	Lithuania	Other currencies	NCB + CIs subject to reserves
Notice deposits	Lithuania	EUR	NCB + CIs subject to reserves
	Lithuania	Other currencies	NCB + CIs subject to reserves
Firm sale and repurchase operations	Lithuania	EUR	NCB + CIs subject to reserves
	Lithuania	Other currencies	NCB + CIs subject to reserves
Issued debt securities	Lithuania	EUR	NCB + CIs subject to reserves
	Lithuania	Other currencies	NCB + CIs subject to reserves

NCB + CIs subject to reserves: Lithuanian national central bank and Latvian credit institutions subject to the Eurosystem's mandatory reserve system The labels of the rows and columns of this table correspond to those used for report S 1.1 to be submitted monthly to the Banque du Luxembourg. The credit institutions concerned can therefore rely on the "Definitions and concepts for statistical reporting by credit institutions".