The Eurosystem’s two-tier system for remunerating excess liquidity holdings

As a part of the broad monetary policy stimulus package introduced at its September meeting, the Governing Council of the ECB decided to introduce a two-tier system for reserve remuneration. The goal of the system is to support the transmission of monetary policy through banks to firms and households by lowering banks’ costs caused by negative interest rates. The system applies as of the seventh maintenance period of 2019 starting on 30 October 2019.