The Eurosystem’s liquidity management measures related to the year-end 2007

Against the background of some tensions in the euro money market in connection with the upcoming end of year, the ECB has already confirmed on 23 November 2007 that, in line with its aim to keep very short term money market interest rates close to the minimum bid rate in the Eurosystem’s main refinancing operations, it would reinforce its policy of allotting more than the benchmark allotment amount in main refinancing operations for as long as needed and at least until after the end of the year. Moreover, on 8 November 2007 the Governing Council decided to renew the two supplementary longer-term refinancing operations which both cover the end of the year.

As an additional measure, the Governing Council decided yesterday, by means of a teleconference, to lengthen the maturity of the main refinancing operation settling on 19 December 2007 to two weeks. The new maturity date will be on 4 January 2008 instead of 28 December 2007. In this operation, the ECB will aim to satisfy the banking sector’s liquidity needs for the entire two-week period, covering both the Christmas holidays and the end of the year. The allotment amount in this operation will be decided in full consistency with the aim of keeping interest rates close to the minimum bid rate.

The main refinancing operation settling on 28 December 2007 will allow potential further liquidity demands to be satisfied.

The ECB continues to monitor liquidity conditions in order to keep very short term rates close to the minimum bid rate. In this regard it continues to aim at balanced liquidity conditions at the end of the maintenance period. If needed, the ECB also stands ready to steer liquidity towards more balanced conditions earlier in the maintenance period.