Banks Plan to Hold More Reserves Amid Regulatory Pressures

The European Central Bank (ECB) conducted its bank treasurer survey in Q4 2025 to gauge banks' expected demand for central bank reserves. The survey aimed to understand how regulatory requirements and market conditions influence banks' liquidity management practices.

The ECB received responses from 184 banks, accounting for approximately 72% of total banking assets and central bank reserves in the euro area. Banks reported that they intend to hold significantly more reserves than before the global financial crisis, with a median reserve demand ranging from 2% to 6% of total assets, depending on their business models.

The survey found that banks' expected reserve demand is influenced by various factors, including internal liquidity management practices, regulatory requirements, and supervisory expectations. Liquidity regulation was identified as a key determinant of reserve demand, with banks setting internal targets significantly in excess of the 100% regulatory minimum.