THE OPEN MARKET OPERATIONS OF THE ECB

The Open market operations of Central Banks consist in providing liquidity to commercial banks to help them solve their short-term cash issues. The ECB open market operations can be divided into four categories: 1 / the main refinancing operations (MRO), for providing liquidity on a weekly basis, with a maturity of one week for refund. These operations represent more than 85% of monetary contributions to second-tier banks, 2 / longer term refinancing operations (LTROs), intended to provide liquidity on a monthly basis, with a maturity of three month. They constitute about 14% of monetary contributions to second-tier banks. PROs and LTROs constitute more than 99% of contributions from the ECB, 3 / other contributions in monetary transactions are marginal, affecting less than 1% of the contributions of the ECB and they happen only occasionally.