THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), and in particular Article 26.2 thereof,
Whereas:
(1) Decision ECB/2006/17 of 10 November 2006 on the annual accounts of the European Central Bank(1) has been substantially amended several times. Since further amendments are to be made, in particular with regard to the hedging of interest rate risk, it should be recast in the interests of clarity.
(2) Guideline ECB/2006/16 of 10 November 2006 on the legal framework for accounting and financial reporting in the European System of Central Banks(2) to which Decision ECB/2006/17 refers has been recast and repealed by Guideline ECB/2010/20 of 11 November 2010 on the legal framework for accounting and financial reporting in the European System of Central Banks(3),
HAS ADOPTED THIS DECISION:
1.The terms defined in Article 1 of Guideline ECB/2010/20 shall have the same meaning when used in this Decision.
2.Other technical terms used in this Decision shall have the same meaning as in Annex II to Guideline ECB/2010/20.
The rules set out in this Decision shall apply to the annual accounts of the European Central Bank (ECB) comprising the balance sheet, items recorded in the books of the ECB off-balance-sheet, the profit and loss account and the notes to the annual accounts of the ECB.
The basic accounting assumptions defined in Article 3 of Guideline ECB/2010/20 shall also apply for the purposes of this Decision.
A financial or other asset/liability shall only be recognised in the balance sheet of the ECB in accordance with Article 4 of Guideline ECB/2010/20.
The rules set out in Article 5 of Guideline ECB/2010/20 shall apply to this Decision.
The composition of the balance sheet shall be based on the structure set out in Annex I.
Taking into due consideration the nature of the ECB’s activities, the Governing Council may establish a provision for foreign exchange rate, interest rate, credit and gold price risks in the balance sheet of the ECB. The Governing Council shall decide on the size and use of the provision on the basis of a reasoned estimate of the ECB’s risk exposures.
1.Current market rates and prices shall be used for balance sheet valuation purposes unless specified otherwise in Annex I.
2.The revaluation of gold, foreign currency instruments, securities other than those classified as held-to-maturity and non-marketable securities, as well as financial instruments, both on-balance-sheet and off-balance-sheet, shall be performed at the year-end at mid-market rates and prices.
3.No distinction shall be made between price and currency revaluation differences for gold, but a single gold revaluation difference shall be accounted for, based on the euro price per defined unit of weight of gold derived from the euro/US dollar exchange rate on the quarterly revaluation date. For foreign exchange, including on-balance-sheet and off-balance-sheet transactions, revaluation shall take place on a currency-by-currency basis. For the purpose of this Article, holdings of SDRs, including designated individual foreign exchange holdings underlying the SDR basket, shall be treated as one holding. For securities, revaluation shall take place on a code-by-code basis, i.e. same ISIN number/type. Securities held for monetary policy purposes or included in the items ‘Other financial assets’ or ‘Sundry’ shall be treated as separate holdings.
4.Securities classified as held-to-maturity shall be treated as separate holdings, valued at amortised costs and subject to impairment. The same treatment shall apply to non-marketable securities. Securities classified as held-to-maturity may be sold before their maturity in any of the following circumstances:
(a)if the quantity sold is considered not significant in comparison with the total amount of the held-to-maturity securities portfolio;
(b)if the securities are sold during the month of the maturity date;
(c)under exceptional circumstances, such as a significant deterioration of the issuer’s creditworthiness, or following an explicit monetary policy decision of the Governing Council.
Reverse transactions shall be accounted for in accordance with Article 8 of Guideline ECB/2010/20.
Marketable equity instruments shall be accounted for in accordance with Article 9 of Guideline ECB/2010/20.
The hedging of interest rate risk shall be accounted for in accordance with Article 10 of Guideline ECB/2010/20.
Synthetic instruments shall be accounted for in accordance with Article 11 of Guideline ECB/2010/20.
1.Article 13(1), (2), (3), (5) and (7) of Guideline ECB/2010/20 shall apply to income recognition.
2.Holdings on special revaluation accounts stemming from contributions in accordance with Article 48.2 of the Statute of the ESCB with respect to central banks of Member States for which the derogation has been abrogated shall be used to offset unrealised losses when exceeding previous revaluation gains registered in the corresponding standard revaluation account as laid down by Article 13(1)(c) of Guideline ECB/2010/20, prior to the offsetting of such losses in accordance with Article 33.2 of the Statute of the ESCB. The holdings on special revaluation accounts for gold, currencies and securities shall be reduced pro rata in the event of a reduction in the holdings of the relevant assets.
Article 14 of Guideline ECB/2010/20 shall apply to this Decision.
Article 15 of Guideline ECB/2010/20 shall apply to this Decision.
Foreign exchange forward transactions shall be accounted for in accordance with Article 16 of Guideline ECB/2010/20.
Foreign exchange swaps shall be accounted for in accordance with Article 17 of Guideline ECB/2010/20.
Future contracts shall be accounted for in accordance with Article 18 of Guideline ECB/2010/20.
Interest rate swaps shall be accounted for in accordance with Article 19 of Guideline ECB/2010/20. Unrealised losses taken to the profit and loss account at the year-end shall be amortised in subsequent years in accordance with the straight-line method. For forward interest rate swaps the amortisation shall begin from the value date of the transaction.
Forward rate agreements shall be accounted for in accordance with Article 20 of Guideline ECB/2010/20.
Forward transactions in securities shall be accounted for in accordance with Method A in Article 21(1) of Guideline ECB/2010/20.
Options shall be accounted for in accordance with Article 22 of Guideline ECB/2010/20.
1.The format of the ECB’s published annual balance sheet shall follow the format in Annex II.
2.The format of the ECB’s published profit and loss account shall comply with Annex III.
1.In interpreting this Decision, account shall be taken of the preparatory work, the accounting principles harmonised by Union law and generally accepted international accounting standards.
2.If a specific accounting treatment is not laid down in this Decision and in the absence of a decision to the contrary by the Governing Council, the ECB shall follow valuation principles in accordance with International Accounting Standards as adopted by the European Union, which are relevant to the ECB’s activities and accounts.
Decision ECB/2006/17 is hereby repealed. References to the repealed Decision shall be construed as references to this Decision and shall be read in accordance with the correlation table in Annex V.
This Decision shall enter into force on 31 December 2010.
Done at Frankfurt am Main, 11 November 2010.
The President of the ECB
Jean-Claude Trichet
Note: the numbering relates to the balance sheet format given in Annex II.
| b See page 26 of this Official Journal. Decision ECB/2010/29 adopted before publication of Decision ECB/2010/21. | ||
| Balance sheet item | Categorisation of contents of balance sheet items | Valuation principle |
|---|---|---|
1 Gold and gold receivables | Physical gold, i.e. bars, coins, plates, nuggets, in storage or ‘under way’. Non-physical gold, such as balances in gold sight accounts (unallocated accounts), term deposits and claims to receive gold arising from the following transactions: (a) upgrading or downgrading transactions; and (b) gold location or purity swaps where there is a difference of more than one business day between release and receipt | Market value |
2 Claims on non-euro area residents denominated in foreign currency | Claims on counterparties resident outside the euro area including international and supranational institutions and central banks outside the euro area denominated in foreign currency | |
2.1 Receivables from the International Monetary Fund (IMF) | (a) Drawing rights within the reserve tranche (net)National quota minus balances in euro at the disposal of the IMF. The No 2 account of the IMF (euro account for administrative expenses) may be included in this item or under the item ‘Liabilities to non-euro area residents denominated in euro’ | (a) Drawing rights within the reserve tranche (net)Nominal value, translation at the foreign exchange market rate |
(b) SDRsHoldings of SDRs (gross) | (b) SDRsNominal value, translation at the foreign exchange market rate | |
(c) Other claimsGeneral arrangements to borrow, loans under special borrowing arrangements, deposits made to trusts under the management of the IMF | (c) Other claimsNominal value, translation at the foreign exchange market rate | |
2.2 Balances with banks and security investments, external loans and other external assets | (a) Balances with banks outside the euro area other than those under asset item 11.3 ‘Other financial assets’Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions | (a) Balances with banks outside the euro areaNominal value, translation at the foreign exchange market rate |
(b) Security investments outside the euro area other than those under asset item 11.3 ‘Other financial assets’Notes and bonds, bills, zero bonds, money market paper, equity instruments held as part of the foreign reserves, all issued by non-euro area residents | (b)(i) Marketable securities other than held-to-maturity Market price and foreign exchange market rate Any premiums or discounts are amortised (ii) Marketable securities classified as held-to-maturity Cost subject to impairment and foreign exchange market rate Any premiums or discounts are amortised (iii) Non-marketable securities Cost subject to impairment and foreign exchange market rate Any premiums or discounts are amortised (iv) Marketable equity instruments Market price and foreign exchange market rate | |
(c) External loans (deposits) to non-euro area residents other than those under asset item 11.3 ‘Other financial assets’ | (c) External loansDeposits at nominal value, translated at the foreign exchange market rate | |
(d) Other external assetsNon-euro area banknotes and coins | (d) Other external assetsNominal value, translation at the foreign exchange market rate | |
3 Claims on euro area residents denominated in foreign currency | (a) Security investments inside the euro area other than those under asset item 11.3 ‘Other financial assets’Notes and bonds, bills, zero bonds, money market paper, equity instruments held as part of the foreign reserves, all issued by euro area residents | (a)(i) Marketable securities other than held-to-maturity Market price and foreign exchange market rate Any premiums or discounts are amortised (ii) Marketable securities classified as held-to-maturity Cost subject to impairment and foreign exchange market rate Any premiums or discounts are amortised (iii) Non-marketable securities Cost subject to impairment and foreign exchange market rate Any premiums or discounts are amortised (iv) Marketable equity instruments Market price and foreign exchange market rate |
(b) Other claims on euro area residents other than those under asset item 11.3 ‘Other financial assets’Loans, deposits, reverse repo transactions, sundry lending | (b) Other claimsDeposits and other lending at nominal value, translated at the foreign exchange market rate | |
4 Claims on non-euro area residents denominated in euro | ||
4.1 Balances with banks, security investments and loans | (a) Balances with banks outside the euro area other than those under asset item 11.3 ‘Other financial assets’Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions in connection with the management of securities denominated in euro | (a) Balances with banks outside the euro areaNominal value |
(b) Security investments outside the euro area other than those under asset item 11.3 ‘Other financial assets’Equity instruments, notes and bonds, bills, zero bonds, money market paper, all issued by non-euro area residents | (b)(i) Marketable securities other than held-to-maturity Market price Any premiums or discounts are amortised (ii) Marketable securities classified as held-to-maturity Cost subject to impairment Any premiums or discounts are amortised (iii) Non-marketable securities Cost subject to impairment Any premiums or discounts are amortised (iv) Marketable equity instruments Market price | |
(c) Loans to non-euro area residents other than those under asset item 11.3 ‘Other financial assets’ | (c) Loans outside the euro areaDeposits at nominal value | |
(d) Securities issued by entities outside the euro area other than those under asset item 11.3‘Other financial assets’Securities issued by supranational or international organisations, e.g. the European Investment Bank, irrespective of their geographical location | (d)(i) Marketable securities other than held-to-maturity Market price Any premiums or discounts are amortised (ii) Marketable securities classified as held-to-maturity Cost subject to impairment Any premiums or discounts are amortised (iii) Non-marketable securities Cost subject to impairment Any premiums or discounts are amortised | |
4.2 Claims arising from the credit facility under ERM II | Lending in accordance with the ERM II conditions | Nominal value |
5 Lending to euro area credit institutions related to monetary policy operations denominated in euro | Items 5.1 to 5.5: transactions in accordance with the respective monetary policy instruments described in Annex I to Guideline ECB/2000/7 of 31 August 2000 on monetary policy instruments and procedures of the Eurosystema | |
5.1 Main refinancing operations | Regular liquidity-providing reverse transactions with a weekly frequency and normally a maturity of 1 week | Nominal value or repo cost |
5.2 Longer-term refinancing operations | Regular liquidity-providing reverse transactions with a monthly frequency and normally a maturity of 3 months | Nominal value or repo cost |
5.3 Fine-tuning reverse operations | Reverse transactions, executed as ad hoc transactions for fine-tuning purposes | Nominal value or repo cost |
5.4 Structural reverse operations | Reverse transactions adjusting the structural position of the Eurosystem vis-à-vis the financial sector | Nominal value or repo cost |
5.5 Marginal lending facility | Overnight liquidity facility at a pre-specified interest rate against eligible assets (standing facility) | Nominal value or repo cost |
5.6 Credits related to margin calls | Additional credit to credit institutions, arising from value increases of underlying assets regarding other credit to these credit institutions | Nominal value or cost |
6 Other claims on euro area credit institutions denominated in euro | Current accounts, fixed-term deposits, day-to-day money, reverse repo transactions in connection with the management of security portfolios under the asset item 7 ‘Securities of euro area residents denominated in euro’, including transactions resulting from the transformation of former foreign currency reserves of the euro area, and other claims. Correspondent accounts with non-domestic euro area credit institutions. Other claims and operations unrelated to monetary policy operations of the Eurosystem | Nominal value or cost |
7 Securities of euro area residents denominated in euro | ||
7.1 Securities held for monetary policy purposes | Securities issued in the euro area held for monetary policy purposes. ECB debt certificates purchased for fine-tuning purposes | (a) Marketable securities other than held-to-maturityMarket price Any premiums or discounts are amortised (b) Marketable securities classified as held-to-maturityCost subject to impairment (cost when the impairment is covered by a provision under liability item 13(b) ‘Provisions’) Any premiums or discounts are amortised (c) Non-marketable securitiesCost subject to impairment Any premiums or discounts are amortised |
7.2 Other securities | Securities other than those under asset item 7.1 ‘Securities held for monetary policy purposes’ and under asset item 11.3 ‘Other financial assets’: notes and bonds, bills, zero bonds, money market paper held outright, including government securities stemming from before EMU, denominated in euro. Equity instruments | (a) Marketable securities other than held-to-maturityMarket price Any premiums or discounts are amortised (b) Marketable securities classified as held-to-maturityCost subject to impairment Any premiums or discounts are amortised (c) Non-marketable securitiesCost subject to impairment Any premiums or discounts are amortised (d) Marketable equity instrumentsMarket price |
8 General government debt denominated in euro | Claims on government stemming from before EMU (non-marketable securities, loans) | Deposits/loans at nominal value, non-marketable securities at cost |
9 Intra-Eurosystem claims | ||
9.1 Claims related to the issuance of ECB debt certificates | Intra-Eurosystem claims vis-à-vis NCBs, arising from the issuance of ECB debt certificates | Cost |
9.2 Claims related to the allocation of euro banknotes within the Eurosystem | Claims related to the ECB's banknote issue, in accordance with Decision ECB/2010/29 of 13 December 2010 on the issue of euro banknotesb | Nominal value |
9.3 Other claims within the Eurosystem (net) | Net position of the following sub-items: | |
(a)net claims arising from balances of TARGET2 accounts and correspondent accounts of NCBs, i.e. the net figure of claims and liabilities. See also liability item 10.2 ‘Other liabilities within the Eurosystem (net)’ | (a)Nominal value | |
(b)other intra-Eurosystem claims denominated in euro that may arise, including the interim distribution of ECB income to NCBs | (b)Nominal value | |
10 Items in course of settlement | Settlement account balances (claims), including the float of cheques in collection | Nominal value |
11 Other assets | ||
11.1 Coins of euro area | Euro coins | Nominal value |
11.2 Tangible and intangible fixed assets | Land and buildings, furniture and equipment including computer equipment, software | Cost less depreciation Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The useful life is the period over which a fixed asset is expected to be available for use by the entity. Useful lives of individual material fixed assets may be reviewed on a systematic basis, if expectations differ from previous estimates. Major assets may comprise components with different useful lives. The lives of such components should be assessed individually The cost of intangible assets includes the price for the acquisition of the intangible asset. Other direct or indirect costs are to be expensed Capitalisation of expenditure: limit based (below EUR 10 000 excluding VAT: no capitalisation) |
11.3 Other financial assets |
| (a) Marketable equity instrumentsMarket price (b) Participating interests and illiquid equity shares, and any other equity instruments held as permanent investmentsCost subject to impairment (c) Investment in subsidiaries or significant interestsNet asset value (d) Marketable securities other than held to maturityMarket price Premiums/discounts are amortised (e) Marketable securities classified as held-to-maturity or held as a permanent investmentCost subject to impairment Any premiums or discounts are amortised (f) Non-marketable securitiesCost subject to impairment (g) Balances with banks and loansNominal value, translated at the foreign exchange market rate if the balances/deposits are denominated in foreign currencies |
11.4 Off-balance-sheet instruments revaluation differences | Valuation results of foreign exchange forwards, foreign exchange swaps, interest rate swaps, forward rate agreements, forward transactions in securities, foreign exchange spot transactions from trade date to settlement date | Net position between forward and spot, at the foreign exchange market rate |
11.5 Accruals and prepaid expenditure | Income not due in, but assignable to the reported period. Prepaid expenditure and accrued interest paid, i.e. accrued interest purchased with a security | Nominal value, foreign exchange translated at market rate |
11.6 Sundry | (a)Advances, loans and other minor items. Loans on a trust basis | (a)Nominal value or cost |
(b)Investments related to customer gold deposits | (b)Market value | |
(c)Net pension assets | (c)As per Article 24(2) | |
(d)Outstanding claims arising from the default of Eurosystem counterparties in the context of Eurosystem credit operations | (d)Nominal/recoverable value (before/after settlement of losses) | |
(e)Assets or claims (vis-à-vis third parties) appropriated and/or acquired in the context of the realisation of collateral submitted by Eurosystem counterparties in default | (e)Cost (converted at the foreign exchange market rate at the time of the acquisition if financial assets are denominated in foreign currencies) | |
12 Loss for the year | Nominal value | |
| a The ECB may alternatively publish exact euro amounts, or amounts rounded in a different manner. | |||||
| b The table of assets may also be published above the table of liabilities. | |||||
| (EUR million)a | |||||
| Assetsb | Reporting year | Previous year | Liabilities | Reporting year | Previous year |
|---|---|---|---|---|---|
1.Gold and gold receivables2.Claims on non-euro area residents denominated in foreign currency2.1.Receivables from the IMF2.2.Balances with banks and security investments, external loans and other external assets3.Claims on euro area residents denominated in foreign currency4.Claims on non-euro area residents denominated in euro4.1.Balances with banks, security investments and loans4.2.Claims arising from the credit facility under ERM II5.Lending to euro area credit institutions related to monetary policy operations denominated in euro5.1.Main refinancing operations5.2.Longer-term refinancing operations5.3.Fine-tuning reverse operations5.4.Structural reverse operations5.5.Marginal lending facility5.6.Credits related to margin calls6.Other claims on euro area credit institutions denominated in euro7.Securities of euro area residents denominated in euro7.1.Securities held for monetary policy purposes7.2.Other securities8.General government debt denominated in euro9.Intra-Eurosystem claims9.1.Claims related to the issuance of ECB debt certificates9.2.Claims related to the allocation of euro banknotes within the Eurosystem9.3.Other claims within the Eurosystem (net)10.Items in course of settlement11.Other assets11.1.Coins of euro area11.2.Tangible and intangible fixed assets11.3.Other financial assets11.4.Off-balance-sheet instruments revaluation differences11.5.Accruals and prepaid expenses11.6.Sundry12.Loss for the year | 1.Banknotes in circulation2.Liabilities to euro area credit institutions related to monetary policy operations denominated in euro2.1.Current accounts (covering the minimum reserve system)2.2.Deposit facility2.3.Fixed-term deposits2.4.Fine-tuning reverse operations2.5.Deposits related to margin calls3.Other liabilities to euro area credit institutions denominated in euro4.ECB debt certificates issued5.Liabilities to other euro area residents denominated in euro5.1.General government5.2.Other liabilities6.Liabilities to non-euro area residents denominated in euro7.Liabilities to euro area residents denominated in foreign currency8.Liabilities to non-euro area residents denominated in foreign currency8.1.Deposits, balances and other liabilities8.2.Liabilities arising from the credit facility under ERM II9.Counterpart of special drawing rights allocated by the IMF10.Intra-Eurosystem liabilities10.1.Liabilities equivalent to the transfer of foreign reserves10.2.Other liabilities within the Eurosystem (net)11.Items in course of settlement12.Other liabilities12.1.Off-balance-sheet instruments revaluation differences12.2.Accruals and income collected in advance12.3.Sundry13.Provisions14.Revaluation accounts15.Capital and reserves15.1.Capital15.2.Reserves16.Profit for the year | ||||
| Total assets | Total liabilities | ||||
| a The ECB may alternatively publish exact euro amounts, or amounts rounded in a different manner. | ||
| b The breakdown between income and expenses may alternatively be provided in the explanatory notes to the annual accounts. | ||
| c This includes administrative provisions. | ||
| d This item is used in the case of outsourced banknote production (for the cost of the services provided by external companies in charge of the production of banknotes on behalf of the central banks). It is recommended that the costs incurred in connection with the issue of euro banknotes should be taken to the profit and loss account as they are invoiced or otherwise incurred, see also Guideline ECB/2010/20. | ||
| (EUR million)a | ||
| Profit and loss account for the year ending 31 December … | Reporting year | Previous year |
|---|---|---|
1.1.1. Interest income on foreign reserve assets | ||
1.1.2. Interest income arising from the allocation of euro banknotes within the Eurosystem | ||
1.1.3. Other interest income | ||
1.1. Interest income | ||
1.2.1. Remuneration of NCBs’ claims in respect of foreign reserves transferred | ||
1.2.2. Other interest expense | ||
1.2. Interest expense | ||
1.Net interest income | ||
2.1. Realised gains/losses arising from financial operations | ||
2.2. Write-downs on financial assets and positions | ||
2.3. Transfer to/from provisions for foreign exchange rate, interest rate, credit and gold price risks | ||
2.Net result of financial operations, write downs and risk provisions | ||
3.1. Fees and commissions income | ||
3.2. Fees and commissions expense | ||
3.Net income/expense from fees and commissionsb | ||
4.Income from equity shares and participating interests | ||
5.Other income | ||
| Total net income | ||
6.Staff costsc | ||
7.Administrative expensesc | ||
8.Depreciation of tangible and intangible fixed assets | ||
9.Banknote production servicesd | ||
10.Other expenses | ||
| (Loss)/profit for the year | ||
| Decision ECB/2006/17 | OJ L 348, 11.12.2006, p. 38. |
| Decision ECB/2007/21 | OJ L 42, 16.2.2008, p. 83. |
| Decision ECB/2008/22 | OJ L 36, 5.2.2009, p. 22. |
| Decision ECB/2009/19 | OJ L 202, 4.8.2009, p. 54. |
| Decision ECB/2009/29 | OJ L 348, 29.12.2009, p. 57. |
| Decision ECB/2006/17 | This Decision |
|---|---|
| — | Article 11 |
| Article 10a | Article 12 |
| Article 11 | Article 13 |
| Article 12 | Article 14 |
| Article 13 | Article 15 |
| Article 14 | Article 16 |
| Article 15 | Article 17 |
| Article 16 | Article 18 |
| Article 17 | Article 19 |
| Article 18 | Article 20 |
| Article 19 | Article 21 |
| Article 20 | Article 22 |
| Article 21 | Article 23 |
| Article 22 | Article 24 |
| Article 23 | Article 25 |
| Article 24 | Article 26 |
See page 31 of this official Journal.