Unification of the remunerated and the non-remunaterated components of bank's required reserves with the Bank of Greece
16/02/2000 - Press Releases
The Monetary Policy Council of the Bank of Greece, by its Act No. 30/14
February 2000, amended the provisions governing the system of reserve requirements on
credit institutions, with a view to:
- enhancing the efficiency of credit institutions' liquidity management in view of the
start of the HERMES system for the real-time settlement of payments in drachmas;
- adjusting the operational framework of required reserves to that used by the European
System of Central Banks.
Specifically:
- The distinction between the remunerated and the non-remunerated component of reserves is
eliminated; as from the start of the HERMES system, total holdings on reserve accounts
will be remunerated at a single rate;
- Credit institutions, as long as they fulfill the reserve requirement on average during a
maintenance period of one month, will continue to be able to manage freely a part of their
reserve holdings equal to up to 15 per cent of their respective reserve requirements and
may use it also for the settlement of payments in the context of HERMES, once it becomes
operative.
- The interest rate applicable to credit institutions' reserve holdings with the Bank of
Greece will be determined by a decision of the Monetary Policy Council and will correspond
to the mean of the rates currently applicable to the existing two components (i.e. the
remunerated and the non-remunerated component).