( ii ) longer term refinancing operations ( LTROs ) and ( iii ) fine tuning operations ( FTOs ) ( see Table 1 ) .

Contingency facilities are maintained by the Eurosystem to support its operations . Liquidity risk Liquidity risk is the risk of being unable to unwind or offset a particular position , without difficulty , at or near the previous market price owing to inadequate market depth or disruptions in the market place .

Lending to euro area credit institutions related to monetary policy operations denominated in euro 5.1 . Main refinancing operations 5.2 .

Implemented since January 1999 for portfolio investment transactions .

Implemented for portfolio investment transactions since January 1999 .

Article 18 establishes the Bank s right to enter into financial operations .

Overview of the monetary policy framework Open market operations Main refinancing Reverse transactions operations Longer term refinancing operations Fine tuning operations Reverse transactions

Official Journal of the European Union

Liquidity providing OPEN MARKET OPERATIONS Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions Reverse transactions Foreign exchange swaps Liquidity absorbing

Open market operations Main refinancing Reverse operations transactions Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions Foreign exchange swaps One week Three months Weekly Monthly Standard tenders Standard tenders

Code Sample New business New business New business Sample Sample All banks New business

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions Reverse transactions Foreign exchange swaps One week Three months Weekly Monthly Standard tenders Standard tenders

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions One week Three months Weekly Monthly Standard tenders Standard tenders

Back Office Front Office Investment Market Operations Analysis Market Operations Systems

Code Sample New business New business New business Sample Sample ( 41 MFIs )

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions One week Three months Weekly Monthly Standard tenders Standard tenders

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions Two weeks Weekly Standard tenders

Open market operations Main refi nancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions Reverse transactions Foreign exchange swaps One week Weekly Standard tenders Standard tenders Quick tenders Bilateral procedures

Back Office Front Office Investment Market Operations Analysis Market Operations Systems Directorate General Market Operations Francesco Papadia Deputies Paul Mercier , Werner Studener

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations

NL . 01 Sample New business New business New business Sample Sample ( 41 MFIs ) All banks Outstanding amounts

Such operations are carried out through a weekly standard tender and normally have a maturity of one week .

Open market operations Main refinancing operations Longer term refinancing operations Fine tuning operations Reverse transactions Reverse transactions One week Weekly Standard tenders

Such operations are carried out through a weekly standard tender and normally have a maturity of one week .

These operations are treated as financial transactions .

Code Sample New business New business Sample

Reverse transactions Foreign exchange swaps

Longer term refinancing operations

Transactions per type of payment instrument ( 1 ) Transactions per type of terminal ( 1 )

Transactions per type of payment instrument ( ) 1 Transactions per type of terminal ( 1 )

their maturity is not standardised a priori

Outright purchases Structural operations Reverse transactions Outright purchases

Interest rates on CDs between 18 and 24 months BISM .

New business Outstanding amounts and new business

The time of settlement of the main and the longer term refinancing operations normally coincides with the time of reimbursement of a previous operation of corresponding maturity .

OWN FUNDS MANAGEMENT The ECB 's own funds portfolio consists of the invested counterpart of the ECB 's paid up capital , as well as amounts held from time to time in its general reserve fund and its provision against foreign exchange rate , interest rate and gold price risks . The purpose of this portfolio is to provide the ECB with income to help to cover its operating expenses .

In these operations , the ESCB does not , as a rule , intend to send signals to the market and therefore normally acts as a rate taker .

Credit risk assessment Assets used as collateral in Eurosystem credit operations must meet high credit standards .

Divisions Back Office Front Office Investment Market Operations Analysis Market Operations Systems Risk Management 2

Longer term refinancing operations Regular liquidity providing reverse transactions with a monthly frequency and normally a maturity of three months

As can be seen from Chart 4.1 , the EONIA has been close to the rate on the main refinancing operations , thus illustrating the importance of these operations as the main monetary policy instrument of the Eurosystem .

With regard to their aims , regularity and procedures , Eurosystem open market operations can be divided into four categories main refinancing operations , longer term refinancing operations , fine tuning operations and structural operations .

In addition , the Eurosystem can use reverse transactions for structural and fine tuning operations .

Structural reverse operations 3.2 .