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Structural operations will meet part of the banking system’s liquidity needs in the future
The amount of liquidity in the banking system has been declining as assets acquired under the European Central Bank’s purchase programmes mature. As liquidity declines further, banks will have a growing demand for the Eurosystem’s standard refinancing operations. When this demand grows sufficiently, the supply of liquidity will be supplemented with new structural refinancing operations and asset purchases in a structural bond portfolio.
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Banks are encouraged to participate in Eurosystem standard refinancing operations as central bank reserves decline
By the end of 2026, the continued decline in central bank reserves in the euro area banking system will mean that around half of euro area banks will have reached their preferred level of reserves, according to Eurosystem projections. As central bank reserves decline, the use of Eurosystem standard refinancing operations is in turn expected to increase from its current level.