Circular Letter ST.21-0041 — Update of the ECB Regulation on Reserve Requirements

2, boulevard Royal ◦ L-2983 Luxembourg ◦ Fax (+352) 4774-4943 ◦ E-mail: stat@bcl.lu 1 / 2 Ref.: ST.21-0041 Luxembourg, 2 February 2021 Circular Letter To all credit institutions Subject: Update of the ECB Regulation on reserve requirements

Dear Sirs and Madams,

On 22 January 2021, the Governing Council of the European Central Bank (ECB) adopted ECB Regulation 2021/1 on the application of reserve requirements by the Eurosystem.

The amendment to the aforementioned regulation was necessary to take into account the extension of the definition of credit institution in Article 4(1)(1) in the amendments to the capital requirements regulation 1 to include systemic investment firms from 26 June 2021.

Thus, insofar as these are considered credit institutions, they will be subject to the Eurosystem's reserve requirements and, consequently, will be included in the official list of institutions subject to reserve requirements published on the European Central Bank's website.

It follows that the deposits placed by these institutions with credit institutions can be deducted from the reserve requirement base. To this end, these amounts must be entered in lines "MRR001" and "MRR002" so that they can be deducted from the reserve base for the calculation of line "2-ERO-XX-XXX-90000", which reports the net reserve requirement of a bank.

This measure will take effect with the June 2021 reporting.

In this context, we also wish to inform you that European supranational bodies (ECB and EUROSTAT) have decided to modify the statistical classification of the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM). Indeed, in order to align the statistical treatment of the EFSF with that of the ESM, the EFSF is now to be considered a supranational entity and no longer a Luxembourg resident. Furthermore, in order to ensure appropriate treatment in macroeconomic statistics, we have adjusted the definitions and concepts for the establishment of statistical reporting by credit institutions so that the EFSF and ESM are now to be reported with sector code "11000" and not with sector code "42900".

This measure takes effect immediately.

Please accept, Sirs and Madams, the assurance of our highest consideration.

CENTRAL BANK OF LUXEMBOURG

Romain Weber Roland Nockels
Deputy Head of Department Head of Department

1 Regulation (EU) No 2019/2033 of the European Parliament and of the Council of 27 November 2019 on prudential requirements applicable to investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314 of 5.12.2019, p. 1).