Banks Hold onto Reserves as ECB Survey Reveals Significant Demand

The European Central Bank (ECB) conducted a survey of its counterparties to gauge their expected demand for central bank reserves. The survey, which took place from October 14 to 29, 2025, received responses from 184 banks, representing around 72% of total banking assets and central bank reserves in the euro area.

The results show that banks intend to hold central bank reserves significantly above the ECB's minimum reserve requirements (MRR). Before the global financial crisis, euro area banks operated with reserve levels just sufficient to satisfy their MRR. However, today, banks aim to hold reserves in excess of 170 billion euros, which is a significant increase.

The survey highlights that banks' expected reserve demand reflects various factors, including internal liquidity management practices, liquidity and MRR regulations, expectations about future deposit outflows, supervisory expectations and guidance, as well as a preference to signal a strong liquidity position to investors.