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How Euro Banknotes in Circulation Affect Intra-Eurosystem Balances

Author

Listed:
  • Lenka Krsnakova

    (Oesterreichische Nationalbank, Financial Statements and Treasury Risk Monitoring Division)

  • Maria Oberleithner

    (Oesterreichische Nationalbank, Financial Statements and Treasury Risk Monitoring Division)

Abstract

The cash changeover to the euro created the need to present banknotes in circulation in an innovative manner to allocate them adequately across the balance sheets of the Eurosystem central banks. The solution adopted was to undertake regular accounting adjustments of the circulating banknotes. This article presents the relationships between the relevant balance sheet items – primarily intra-Eurosystem balances arising from such adjustment and the liability constituted by banknotes in circulation – and provides insights into the origins of this mechanism and its legal basis. The value of euro banknotes in circulation, as now reported by 18 Eurosystem central banks (i.e. including the ECB), has risen consistently over the last ten years and now stands at around EUR 900 billion.

Suggested Citation

  • Lenka Krsnakova & Maria Oberleithner, 2012. "How Euro Banknotes in Circulation Affect Intra-Eurosystem Balances," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 70-80.
    • Handle: RePEc:onb:oenbmp:y:2012:i:1:b:5
    as

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    File URL: https://www.oenb.at/dam/jcr:4984e786-7bd3-4454-8cf7-896603ea3431/mop_2012_q1_in_focus5_tcm16-246791.pdf
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    References listed on IDEAS

    as
    1. Martin Handig & Robert Holzfeind, 2007. "Euro Banknotes in Circulation and the Allocation of Monetary Income within the Eurosystem," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 150-163.
    2. Manfred Fluch & Ernest Gnan & Sabine Schlögl, 2007. "Euro Cash in Austria Five Years after Its Introduction – What the Public Thinks," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 30-54.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Martin Handig & Clemens Jobst & Doris Schneeberger, 2012. "The Cross-Border Movement of Euro Banknotes and Austria’s TARGET 2 Liabilities," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 32-52.
    2. Clemens Jobst & Claudia Kwapil, 2019. "Monetary policy of the Eurosystem and the OeNB’s balance sheet," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1-Q2/19, pages 85-98.
    3. Clemens Jobst & Helmut Stix, 2016. "Florin, crown, schilling and euro: an overview of 200 years of cash in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 94-119.

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    More about this item

    Keywords

    banknotes in circulation; adjustment of banknotes in circulation; intra-Eurosystem balances; capital key;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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