IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Euro Banknotes in Circulation and the Allocation of Monetary Income within the Eurosystem

Listed author(s):
  • Martin Handig


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

  • Robert Holzfeind


    (Oesterreichische Nationalbank)

Banknotes in circulation are traditionally the most important liability item in the balance sheet of central banks. The launch of euro cash created the need to treat this item in new way to reflect the joint liability of all Eurosystem members – the ECB and all national central banks (NCBs) of the euro area – for euro banknotes. In this context, the implications of banknote migration expected both within and outside the euro area, as well as its potential impact on the distribution of profits among the euro area central banks, were subject to extensive discussions already before the cash changeover. A major challenge for the Eurosystem has been the fair allocation of monetary income. This is the income accruing to the individual NCBs in the performance of their monetary policy functions. In particular, this income – traditionally referred to as seigniorage income – includes income derived from assets held against notes in circulation and deposit liabilities to credit institutions. The experience of the first five years after the cash changeover shows that the combination of all relevant aspects of the Eurosystem’s banknote circulation and seigniorage income rules has ensured a fair allocation of monetary income, the functional integrity of the Eurosystem,2 and thus the fulfillment of the objective stipulated by Article 32 of the Statute of the European System of Central Banks3 (ESCB).

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Monetary Policy & the Economy.

Volume (Year): (2007)
Issue (Month): 1 ()
Pages: 150-163

in new window

Handle: RePEc:onb:oenbmp:y:2007:i:1:b:9
Contact details of provider: Postal:
P.O. Box 61, A-1011 Vienna, Austria

Phone: +43/1/404 20 7405
Fax: +43/1/404 20 7499
Web page:

More information through EDIRC

Order Information: Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Hans-Werner Sinn & Holger Feist, 2000. "Der Euro und der Geldschöpfungsgewinn: Gewinner und Verlierer durch die Währungsunion," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 53(31), pages 14-22, December.
  2. Daniel Gros, 1998. "Distributing Seigniorage under EMU," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 51(17-18), pages 29-39, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:onb:oenbmp:y:2007:i:1:b:9. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudia Kwapil)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.