Decision (EU) 2016/2248 of the European Central Bank of 3 November 2016 on the allocation of monetary income of the national central banks of Member States whose currency is the euro (recast) (ECB/2016/36)

For the purposes of this Decision: (a) ‘NCB’ means a national central bank of a Member State whose currency is the euro; (b) ‘credit institution’ means either: (a) a credit institution within the meaning of Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council that is subject to supervision by a competent authority; or (b) another credit institution within the meaning of Article 123(2) of the Treaty that is subject to scrutiny of a standard comparable to supervision by a competent authority; (c) ‘liability base’ means the amount of qualifying liabilities, within the balance sheet of each NCB, specified in accordance with Annex I to this Decision; (d) ‘cash changeover date’ means the date on which euro banknotes and coins become legal tender in a Member State whose currency is the euro; (e) ‘cash changeover year’ means a period of 12 months starting on the cash changeover date; (f) ‘intra-Eurosystem balances on euro banknotes in circulation’ means the claims and liabilities arising between an NCB and the ECB and between an NCB and the other NCBs as a result of the application of Article 4 of Decision ECB/2010/29; (g) ‘subscribed capital key’ means the NCBs' shares, expressed as percentages, in the ECB's subscribed capital that result from applying to the NCBs the weightings in the key referred to in Article 29.1 of the Statute of the ESCB and as applicable for the relevant financial year; (h) ‘withdrawn euro banknotes’ means any euro banknote type or series that has been withdrawn from circulation by a decision of the Governing Council taken pursuant to Article 5 of Decision ECB/2003/4; (i) ‘issue phase’, in relation to a euro banknote type or series, means the period starting on the date on which the first issue of a euro banknote of this type or series is recorded in the liability base and ending on the date on which the last issue of a euro banknote of this type or series is recorded in the liability base; (j) ‘reference rate’ means the latest available marginal interest rate used by the Eurosystem in its tenders for main refinancing operations under Article 6 of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60) . Where more than one main refinancing operation is conducted for settlement on the same day, a simple average of the marginal rates of the operations conducted in parallel is used; (k) ‘earmarkable assets’ means the amount of assets held against the liability base, within the balance sheet of each NCB, specified in accordance with Annex II to this Decision; (l) ‘reference period’ means a period of 24 months starting 30 months before the cash changeover date; (m) ‘daily foreign exchange reference rate’ means the daily foreign exchange reference rate that is based on the regular daily concertation procedure between central banks within and outside the European System of Central Banks, which normally takes place at 14.15 Central European Time ; (n) ‘write off’ means to eliminate withdrawn euro banknotes from the balance sheet item ‘banknotes in circulation’; (o) ‘issue key’ means the average subscribed capital key during the issue phase of a type or series of withdrawn euro banknotes; (p) ‘harmonised balance sheet’ (HBS) means the harmonised balance sheet as set out in Annex VIII to Guideline (EU) 2016/2249 of the European Central Bank (ECB/2016/34) .

1 The intra-Eurosystem balances on euro banknotes in circulation shall be calculated on a monthly basis and shall be recorded in the books of the ECB and the NCBs on the first business day of the month with a value date of the last business day of the preceding month. Where a Member State adopts the euro, the calculation of the intra-Eurosystem balances on euro banknotes in circulation under the first subparagraph shall be recorded in the books of the ECB and the NCBs with a value date of the cash changeover date. The intra-Eurosystem balances on euro banknotes in circulation shall, for the period from 1 to 31 January of the first year with effect from which each quinquennial adjustment pursuant to Article 29.3 of the Statute of the ESCB applies, be calculated on the basis of the adjusted subscribed capital key applied to balances on the total euro banknotes in circulation on 31 December of the previous year.

2 The intra-Eurosystem balances on euro banknotes in circulation, including those resulting from the application of Article 4 of this Decision, shall be remunerated at the reference rate.

3 The remuneration referred to in paragraph 2 shall be settled by TARGET2 payments on a quarterly basis.

1 The amount of each NCB's monetary income shall be determined by measuring the actual income that derives from the earmarkable assets recorded in its books. As exceptions thereto: (a) gold shall not be considered to generate income; (b) the following shall be considered to generate monetary income at the reference rate: (i) securities held for monetary policy purposes under Decision ECB/2009/16; (ii) securities held for monetary policy purposes under Decision ECB/2011/17; (iii) debt instruments issued by central, regional and local governments and recognised agencies and substitute debt instruments issued by public non-financial corporations held for monetary policy purposes under Decision (EU) 2015/774 (ECB/2015/10).

2 Where the value of an NCB's earmarkable assets exceeds or falls short of the value of its liability base, the difference shall be offset by applying the reference rate to the value of the difference.

1 For the purposes of monetary income calculation, each NCB's intra-Eurosystem balances on euro banknotes in circulation shall be adjusted by a compensatory amount determined in accordance with the following formula: C = (K – A) × S where: Cis the compensatory amount,Kis the euro amount for each NCB that results from the application of the subscribed capital key to the average value of banknotes in circulation during the reference period, whereby the amount of banknotes in circulation denominated in the national currency of a Member State that adopts the euro shall be translated into euro at the daily foreign exchange reference rate during the reference period,Ais the average euro value for each NCB of banknotes in circulation during the reference period, translated into euro at the daily foreign exchange reference rate during the reference period,S is the following coefficient for each financial year, starting with the cash changeover date: Financial yearCoefficientCash changeover year1Cash changeover year plus 1 year0,8606735Cash changeover year plus 2 years0,7013472Cash changeover year plus 3 years0,5334835Cash changeover year plus 4 years0,3598237Cash changeover year plus 5 years0,1817225

2 The sum of the compensatory amounts of the NCBs shall be zero.

3 Compensatory amounts shall be calculated each time a Member State adopts the euro or when the ECB's subscribed capital key changes.

4 When an NCB joins the Eurosystem, its compensatory amount shall be allocated to the other NCBs in proportion to the respective shares of the other NCBs in the subscribed capital key, with the sign (+/–) reversed, and shall be in addition to any compensatory amounts already in force for the other NCBs.

5 The compensatory amounts and the accounting entries to balance those compensatory amounts shall be recorded on separate intra-Eurosystem accounts in the books of each NCB with a value date of the cash changeover date and the same value date of each following year of the adjustment period. The accounting entries to balance the compensatory amounts shall not be remunerated.

6 By derogation from paragraph 1, on the occurrence of specific events relating to changes in patterns of banknote circulation, as set out in Annex III to this Decision, each NCB's intra-Eurosystem balances on euro banknotes in circulation shall be adjusted in accordance with the provisions set out in that Annex.

7 The adjustments to intra-Eurosystem balances provided for in this Article shall cease to apply from the first day of the sixth year following the relevant cash changeover year.

1 The calculation of each NCB's monetary income shall be effected by the ECB on a daily basis. The calculation shall be based on accounting data reported by NCBs to the ECB. The ECB shall inform the NCBs of the cumulative amounts on a quarterly basis.

2 The amount of each NCB's monetary income shall be adjusted by an amount equivalent to any interest accrued, paid or received on liabilities included within the liability base, and in accordance with any decision of the Governing Council under the second subparagraph of Article 32.4 of the Statute of the ESCB.

3 The allocation of the sum of each NCB's monetary income in proportion to the subscribed capital key shall take place at the end of each financial year.

1 Withdrawn euro banknotes shall remain part of the liability base until they are exchanged or written off, whichever event occurs first.

2 The Governing Council may decide to write off withdrawn euro banknotes, in which case it shall specify the write-off date and the total amount of the provision to be made for those withdrawn euro banknotes that are still expected to be exchanged.

3 Withdrawn euro banknotes shall be written off as follows: (a) On the write-off date, the ECB's and the NCBs' balance sheet items ‘Banknotes in circulation’ shall be reduced by the total amount of withdrawn euro banknotes still in circulation. For this purpose, the actual amounts of withdrawn euro banknotes that were put into circulation shall be adjusted to their pro-rata amounts calculated in accordance with the issue key, and the differences shall be settled among the ECB and the NCBs. (b) The adjusted amount of withdrawn euro banknotes shall be written off from the balance sheet item ‘Banknotes in circulation’ to the NCBs' profit and loss accounts. (c) Each NCB shall establish a provision for withdrawn euro banknotes that are still expected to be exchanged. The provision shall be equivalent to the relevant NCB's share in the total amount of the provision calculated using the issue key.

4 Withdrawn euro banknotes that are exchanged after the write-off date shall be recorded in the books of the NCB that has accepted them. The inflow of withdrawn euro banknotes shall be redistributed among NCBs at least once a year by applying the issue key, and the differences shall be settled between them. Each NCB shall set off the pro-rata amount against its provision or, in the event that the inflow exceeds the provision, record a corresponding expense in its profit and loss account.

5 The Governing Council shall review the total amount of the provision on an annual basis.

1 Decision ECB/2010/23 is hereby repealed.

2 References to the repealed Decision shall be construed as references to this Decision.

This Decision shall enter into force on 31 December 2016.