Opinion of the European Central Bank of 21 April 2026 on the remuneration of client funds held in current accounts with credit institutions (CON/2026/15)

OPINION OF THE EUROPEAN CENTRAL BANK of 21 April 2026 on the remuneration of client funds held in current accounts with credit institutions (CON/2026/15) Introduction and legal basis

On 10 March 2026 the European Central Bank (ECB) received a request from the Office of the President of Lithuania for an opinion on a draft law on the voluntary economic deployment of residents’ funds held in current accounts with credit institutions (hereinafter the ‘draft law’) and a draft law amending the Law on State debt (hereinafter the ‘draft law on State debt’, together with the draft law, the ‘draft laws’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), sixth indent, of Council Decision 98/415/EC , as the draft laws relate to: (a) the basic task of the European System of Central Banks to implement the monetary policy of the Union pursuant to Article 127(2), first indent, of the Treaty and (b) rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the Article 17.5, first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft laws

1.1 The purpose of the draft laws is to provide an opportunity to Lithuanian residents to earn a return on their funds held in current accounts with credit institutions, at the same time enhancing access to funding in the national economy by mobilising the country’s internal financial resources. The draft law is intended, in particular, to channel such resources for the purposes of promotional funding, including lending for long-term investment projects in the energy, economic competitiveness, national security and defence, housing and transport areas pursued directly by central or local government or through entities wholly or partly owned by them, including under public-private partnership arrangements. 1.2 The explanatory memorandum to the draft laws clarifies that Lithuania is examining the possibility of adapting the French Livret A savings account model. The explanatory memorandum notes that in France the Livret A account is used by 57 million French citizens (80% of the population) and helps to attract over EUR 400 billion for investments into infrastructure. It suggests that residents can earn a return on an attractive and very simple form of savings (current account), while the economy benefits from using a short-term funding source to fund return-generating long-term projects. The explanatory memorandum states that the French model has been operating for many years and in practice poses a low liquidity risk to those implementing the facility, despite the fact that individuals

retain the right to use their funds at any time. The facility is described as helping to fill the long-term funding gap in the market. 1.3 The explanatory memorandum to the draft laws states that the draft law has been prepared taking into account the need to support the growth of Lithuania’s gross domestic product and public tax revenues, as well as to strengthen the resilience of the financial system. In this context, the memorandum notes that the implementation of strategic projects gives rise to a need for additional stable financing, in particular of a long-term nature, while at the same time enabling individuals to contribute in a safe, convenient and voluntary manner to investment in the growth and modernisation of the national economy. 1.4 The explanatory memorandum further notes that, according to data from Lietuvos bankas, in Lithuania as much as two thirds of household deposits generate no return for individuals, as these funds are held in non-interest-bearing current accounts. The memorandum further states that as at the end of October 2025, the deposits of Lithuanian residents with financial institutions operating in Lithuania amounted to EUR 27.1 billion, of which EUR 19 billion were deposits in current accounts. Term deposits totalled EUR 7.8 billion, with the largest share (EUR 6.1 billion) consisting of deposits with maturities of up to one year. 1.5 Under the draft law, a Lithuanian resident with a current account may voluntarily agree that up to EUR 2,500 of the account balance is linked to a special economic growth and development funding facility (the ‘Facility’). With the client’s consent, a credit institution then lends a portion of funds, not exceeding EUR 2,500, held in a client’s current account, to Lithuania’s national development bank (NDB), which uses it to finance long-term investment projects pursued by public sector entities in areas such as energy, economic competitiveness, national security and defence, housing and transport. These funds in the current account with the credit institution remain covered by the Deposit Insurance Fund, and clients retain the right to use all or part of the money in their current account at any time. Each resident may hold only one account linked to the Facility. 1.6 The draft law provides that the interest rate on funds linked to the Facility and payable to residents is set twice a year by Government resolution, by 15 December for the period starting on 1 January and ending on 30 June, and by 15 June for the period starting on 1 July and ending on 31 December. The interest rate is determined primarily on the basis of the ECB’s deposit facility rate and, additionally, to reflect developments in core inflation in Lithuania. The interest rate ranges between a minimum of 0.1% and a maximum of 3%. In the event of significant fluctuations in market interest rates, the Government has the right to change the Facility’s interest rate by 15 March for the period ending on 30 June and by 15 September for the period ending on 31 December, and the changed interest rate on the Facility applies from the first day of the month following the date of the change. 1.7 A credit institution wishing to participate in the Facility submits a request to the NDB and concludes a participation agreement with it, setting out the terms and conditions for the implementation of the draft law, the starting date of participation, and the rights and obligations of the parties. 1.8 A participating credit institution lends funds to the NDB, with the amount lent at the end of each day equal to the total amount of funds linked to the Facility. The NDB pays interest to the participating credit institution on the funds lent under the Facility. The rate of interest payable is the rate paid to residents under the Facility plus an additional margin set by the Minister for Finance of between 0.1

and 1 percentage point. This additional margin is determined separately for each credit institution, taking into account its contribution to the Deposit Insurance Fund and other criteria. A State guarantee is provided to the credit institution in respect of the loans granted to the NDB under the scheme. 1.9 The main purpose of the draft law on State debt is to enable the issuance of State guarantees for loans used for the purposes specified in the draft law. The guarantees are issued in favour of credit institutions in respect of the funds lent to the NDB under the Facility. 1.10 The draft laws provide that they will come into effect on 1 January 2028.

2. General observations

2.1 The ECB has been consulted and adopted opinions previously on modifications and a temporary freezing of the remuneration formula of the French Livret A and certain other French regulated savings accounts . 2.2 The ECB understands that client funds linked to the Facility remain at all times credited to clients’ current accounts, and that under the scheme participating credit institutions enter into separate lending arrangements with the NDB, according to which those credit institutions lend an amount of funds to the NDB that is equal to the amount of client funds that are linked to the Facility.

3. Monetary policy considerations

3.1 The ECB reiterates that it is generally not in favour of regulating savings remuneration, as this derogates from the principle of an open market economy with free competition and presents challenges for the efficient transmission of monetary policy . The discrepancy between money market rates and the regulated rates may generate liquidity costs for banks, thus potentially impeding their financial intermediation role and the stability of the banking system . 3.2 In the particular case of Lithuania, the response of deposit rates to changes in the monetary policy stance has been structurally weak relative to the situation in the euro area. While the remuneration of time deposits tends to reflect the changes in the ECB’s policy interest rates similarly to the euro area average, the response of overnight deposit rates is more muted, and there is no evidence on the sensitivity of rates on deposits redeemable at notice to policy rates as this segment, which is intermediate between overnight and time deposits, makes up only a small fraction of households’ funds. Against this background, the scheme envisaged under the draft law would strengthen the latter segment and could thus possibly expose deposits held on current accounts to a greater extent to the prevailing monetary stance, thereby facilitating the transmission of monetary policy. In particular, households would be given the possibility to hold deposits that are remunerated – more than when held overnight – while not being locked in for a given period as with time deposits. They would thus benefit in nominal terms in periods of higher policy rates as they can rapidly and at low cost move funds in and out of the deposits redeemable at notice segment.

3.3 With a potentially stronger sensitivity of deposits to changes in the monetary policy stance (in terms of remuneration and thus also volumes), the interest rate margins of credit institutions between loans and deposits may potentially become smoother over the policy rate cycle, leading to less volatility in bank profits over the cycle, and thus improved planning capacities for credit institutions, also in terms of compliance with regulatory requirements and of fiscality. In this respect, the very large increase in loan to deposit interest margins during the past monetary policy tightening phase led the Lithuanian Parliament to levy a temporary solidarity contribution on credit institutions. The large widening of the loan to deposit interest margins at the time was due to, on the one hand, the rapid response of bank lending rates – the vast majority of loans to households and firms in Lithuania being at variable rates and thus indexed to policy rate changes –, and on the other hand, the low and relatively stable remuneration of deposits of households and firms, with a sluggish response of the time deposit segment to the changed policy environment and a very muted response of overnight deposits. At the same time, it is acknowledged that the scheme is a priori neutral for banks' revenues and profits, thus not hindering transmission in terms of the banks’ lending capacity. 3.4 At the same time, administered changes in interest rates, whose timing and frequency are limited, may interfere with the transmission of monetary policy and potentially the principle of an open market economy. The setting of interest rates on deposits redeemable at notice considered under the draft law is also subject to a nominal floor and cap, the levels of which may prove inappropriate in future scenarios where they may become binding. Moreover, the use of core inflation in Lithuania as an additional criterion for setting the Facility’s interest rate could possibly undermine an efficient monetary policy transmission and the singleness of monetary policy. Hence, to achieve the intended purpose, the Lithuanian Government may wish to consider less invasive measures to incentivise investments in infrastructure or at least ensure that the interest rate under the proposed scheme is responsive at all times to changes in the ECB’s deposit facility rate.

4. Financial stability considerations

4.1 The ECB reiterates that, to a certain extent, regulating savings remuneration also presents challenges for financial stability . However, given the limit on the amount of client funds that may be linked to the Facility, it is unlikely that the scheme would pose serious financial stability concerns.

This opinion will be published on EUR-Lex.

Done at Frankfurt am Main, 21 April 2026.

[signed]

The President of the ECB

Christine LAGARDE