Bank treasurer survey

Banks’ expected demand for central bank reserves and standard refinancing operations

Report from the Eurosystem survey conducted in Q4 2025

The bank treasurer survey is an important tool to gather systematic views about banks’ expected demand for central bank reserves, including through the usage of the Eurosystem’s standard refinancing operations. In order to provide a valuable input into the ongoing monitoring of banks’ liquidity management and the implementation of monetary policy under the operational framework introduced in 2024, the Eurosystem has conducted a survey of its counterparties with two main objectives. First, to estimate the preferred minimum level of reserves^[1] that banks aim to maintain under current economic and financial conditions and to identify the key drivers of this level. Second, to assess the expected demand for reserves via the Eurosystem’s standard refinancing operations^[2] and its drivers as well as to understand to what extent banks intend to rely on markets for sourcing reserves. The survey also explores how regulatory requirements, particularly those shaping banks’ liquidity management, interact with the demand for central bank reserves.

Survey coverage statistics

The survey was conducted between 14 and 29 October 2025 with responses from 184 banks.^[3] This report provides the summary of the main findings representing bank views about expected reserve demand and SRO demand at the time of the survey. In aggregate, respondents account for approximately 72% of total banking assets and central bank reserves in the euro area (Chart 1). The sample includes institutions of different sizes and business models from all euro area countries, ensuring a balanced representation. This survey has been formulated by Eurosystem staff. Questions do not presume nor should they be interpreted to signal Eurosystem intentions to undertake any particular policy action in the future.^[4]

The survey aims to obtain an estimate of the aggregate reserve demand of Eurosystem eligible counterparties. Surveyed euro area banks are asked about their preferred minimum level of reserves and the precautionary buffer that they deem desirable to maintain given the prevailing economic conditions.^[5] For the purpose of the survey, the preferred minimum level of reserves is defined as the level of reserves that the bank would feel comfortable holding before actively attempting to increase its reserves. In addition, the precautionary buffer is defined as any amount of reserves that the bank intends to maintain on top of the preferred minimum reserve level.

Expected reserve demand is surrounded by considerable uncertainty and remains state-dependent. The answers provided reflect banks’ preferences at the time and, while representative, should be interpreted with caution. Shifts in the economic environment can meaningfully affect banks’ expected reserve demand, which adapts to market conditions.

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, also reflecting the Eurosystem’s operational framework at the time.^[6] Today, banks intend to hold reserves significantly in excess of the MRR, which currently stands at around 170 billion euros.

Banks’ preferred minimum level of reserves depends to a large extent on their business models (Chart 2). Demand for reserves is highly heterogeneous and depends on the structural stability of banks’ funding base linked to their chosen business models. For example, traditional retail banks and diversified lenders indicated the lowest median reserve demand relative to total assets across business models – at around 2% of total assets. In contrast, corporate lenders, custodians and asset managers have a higher relative reserve demand, with the median bank intending to hold 4-6% of total assets as reserves. At the same time, there is a wide dispersion of preferences within business model groups. This reflects a diverse set of drivers that influence reserve demand, including a varying appetite for liquidity risk.

In addition to the preferred minimum level of reserves, some banks opt to also hold a precautionary buffer. Nearly half of the responding banks report that they do not specify internally a precautionary buffer beyond the preferred minimum level of reserves. The remaining banks hold in addition to the preferred minimum a median buffer equal to 0.9% of total assets. The size of the buffer also varies across responding banks.

While aggregate excess liquidity will continue to decline, most bank treasurers expect their reserve positions to remain broadly stable (Chart 6). According to the redemption profile of the Eurosystem monetary policy portfolios, aggregate excess liquidity is expected to decline by around 20% over the course of 2026.^[7] However, banks foresee their reserve positions, and also liquidity metrics such as the LCR and the NSFR, to remain broadly stable (grey bars). In fact, only 2% of respondents expect their reserves to decline by more than 10 percentage points by the end of 2026 (dark yellow bar) while a further 8% of respondents anticipate a moderate decline in reserves between 5 and 10 percentage points (light yellow bar). When accounting for the relative size of banks, the average treasurer expects even a mild increase in its bank’s reserve position over the coming 12 months.

The survey reveals that, in case of a liquidity shortfall, most banks would first tap term money and bond markets and attempt to attract wholesale and retail deposits (Chart 7). In normal market conditions banks aim to make recourse to the most agile liquidity tools, which also provide regulatory value. These include unsecured term money markets, e.g. issuance of commercial paper (CP) and certificates of deposit (CDs), issuance of debt securities, as well as attracting unsecured wholesale and retail deposits. Term repo markets are also a useful tool to source liquidity for longer maturities.^[8] This is in line with the finding that banks are focusing more on the LCR and the NSFR than on their day-to-day reserve position.

Euro area banks are important players in global financial markets and hold reserves with foreign central banks, not just the Eurosystem (Chart 8). Many banks are globally active with subsidiaries and branches across various jurisdictions and with access to multiple central banks. This is not only reflected in multicurrency reserve holdings but also in the currency-specific reserve demand. The largest banks representing 40% of the survey sample hold reserves also in currencies other than the euro. Most popular foreign reserves include the US dollar, the pound sterling and the Japanese yen. Jointly those foreign reserves represent around a quarter of sampled banks’ reserve holdings (left hand side chart).^[9]

Chart 8

Foreign central bank reserve management

a) Share of reserve holdings per currency	b) Approach to multicurrency reserve holdings
(Weighted share)	(Weighted share)

The survey reveals that most banks currently do not plan on participating in SROs in the near term. Only a few surveyed banks expressed plans to participate on a regular basis in these operations in the coming three years (blue bars, left hand side Chart 9). Among those banks that do not have a concrete plan for participation (yellow bars, left hand side), many respondents show willingness to perform operational readiness tests (yellow bars, right hand side). As reserves continue to decline it will be important for banks to be operationally ready to use Eurosystem SROs as routine tools to manage their liquidity.^[10]

Chart 9

Planned participation in standard refinancing operations

a) Planned time of participation	b) Planned type of participation
(Weighted share of respondents)	(Weighted share of respondents)

The expected demand for SROs reflects a number of considerations (Chart 10). Banks intend to borrow from the Eurosystem (i) when SROs become more attractive than comparable market funding, (ii) when market access was impaired or (iii) if banks needed to increase their LCR (top panel, blue bars).^[11] Limited market access remains a relevant factor across institutions, regardless of their size or market share.

Banks’ limited intention to participate in SROs largely reflects ample liquidity positions and favourable market funding conditions. At present, an ample liquidity position stands out as the most significant discouraging factor for banks when considering participation in SROs (lower panel). Moreover, banks see market pricing as more attractive than the MRO rate. Additionally, concerns about how participation in SROs might be viewed by investors, credit rating agencies or other stakeholders emerge as additional considerations.^[12] In this context, it is important to stress that banks making greater use of monetary policy operations over the coming years will not be a symptom of liquidity stress but will rather reflect their day-to-day liquidity management in the context of the ECB’s operational framework.^[13]

Governance of SRO participation