As monetary policy continues to tighten and excess liquidity is gradually drained from the banking system, the European Central Bank (ECB) is confronted with a decision on which liquidity provision framework the Eurosystem should adopt going forward. Three papers were prepared by the ECON Committee’s Monetary Expert Panel, discussing the relative advantages and disadvantages of the ample reserves/floor system versus the scarce reserves/corridor system.
This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 25 September 2023.Source : © European Union, 2023 - EP