What is the reserve ratio?

The reserve ratio is a percentage determined by the European Central Bank (ECB) that is applied to certain items on banks’ balance sheets to determine their minimum reserve requirements.

In the Eurosystem, the European Central Bank (ECB) determines the reserve ratio. Until January 2012, euro area banks had to hold a minimum of 2% of certain liabilities, mainly customers’ deposits, at their national central bank. Since then, this ratio has been lowered to 1%.