ECB Considers Raising Minimum Reserve Requirements

European Central Bank (ECB) President Christine Lagarde announced that the ECB will discuss raising banks' minimum reserve requirements. This move could reduce the ECB's own tax bill and mitigate losses at some national central banks.

The current requirement is for commercial banks to keep 1% of their deposits in an unremunerated account as a buffer against liquidity crunches. Doubling this to 2% would save the ECB and the 21 national central banks of the Eurosystem nearly €4 billion per year, according to Reuters calculations.

Lagarde stated that the topic was not discussed at the latest ECB meeting but will be in the future. A decision is likely to come in the autumn, sources said last month.