Formula and method for calculating a sanction pursuant to Article 7(1) of Regulation (EC) No 2531/98
ANNEX ISupplementary provisions
ANNEX I Formula and method for calculating a sanction pursuant to Article 7(1) of Regulation (EC) No 2531/98 1. Amount of the sanction imposed by the European Central Bank for failure to hold the required level of minimum reserves: If an institution subject to the minimum reserve requirements fails to hold the required level of minimum reserves, in accordance with Council Regulations or regulations or decisions of the ECB associated therewith, a sanction will be imposed which is calculated as a penalty of 2,5 percentage points above the average, taken over the maintenance period in which the non-compliance occurred, of the marginal lending rate of the European System of Central Banks, applied to the daily average amount of minimum reserves the institution concerned failed to hold. The penalty is calculated using the following formula: Where: Pt = penalty to be paid owing to the lack of the required reserves for the maintenance period t Dt = the amount of required holdings lacking for the maintenance period t (as a daily average) Nt = number of calendar days in the maintenance period t I = the calendar day of the maintenance period t MLRi = the marginal lending rate on day i Where an institution subject to the minimum reserve requirements fails to comply with the notification obligation set out in the second subparagraph of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1), if, following the detection of that non-compliance, it is also ascertained that, as a result of the application of point (d) of Article 3(1) of Regulation (EU) 2021/378 (ECB/2021/1), that institution has failed to comply with the obligation to hold the required level of minimum over more than one maintenance period, then the relevant maintenance period for the purposes of calculating the sanction in accordance with Section 1 of this Annex is the maintenance period in which the non-compliance is ascertained. 2. Repetitive breach of the minimum reserve requirements: If an institution subject to the minimum reserve requirements fails to hold the required level of minimum reserves more than twice during a 12-month period, then it is deemed to have committed a repetitive breach. For each repetitive breach a sanction will be imposed which is calculated as a penalty of five percentage points above the average, taken over the maintenance period in which the repetitive breach occurred, of the marginal lending rate of the European System of Central Banks, applied to the daily average amount of minimum reserves the institution concerned failed to hold. The penalty is otherwise calculated using the formula set out in Section 1 of this Annex.