Article 4 Related financial issues

By way of derogation from the third subparagraph of Article 2(1) of Decision (EU) 2016/2248 of the European Central Bank (ECB/2016/36)^f1, the intra-Eurosystem balances on euro banknotes in circulation shall, for the period from 1 February 2020 until 27 February 2020, be calculated on the basis of the capital key applicable from 1 February 2020 applied to balances on the total euro banknotes in circulation on 31 January 2020. For the period from 1 February 2020 until 31 December 2020, the compensatory amounts and the accounting entries to balance those amounts, as described in Article 4(5) of Decision (EU) 2016/2248 (ECB/2016/36), shall be recorded in the books of each national central bank with a value date of 1 February 2020.

In relation to the period from 1 January 2020 until 31 January 2020, the euro area NCBs’ monetary income shall be allocated and distributed in accordance with the capital key weightings applicable on 31 January 2020.

The ECB’s net profit or loss, as the case may be, for the financial year 2020 shall be allocated on the basis of the capital key weightings applicable on 1 February 2020.

Any interim distribution of the ECB’s income on euro banknotes and/or the ECB’s income from securities for the year 2020 shall be allocated on the basis of the capital key weightings applicable on 1 February 2020.

In the event that the ECB makes a loss in the financial year 2020, the ECB shall offset the loss against the following:

If the NCBs’ monetary income from 1 January 2020 until 31 January 2020 needs to be transferred to the ECB to cover its loss for the financial year 2020 compensatory payments in addition to the payments described in Article 2 and Article 3 shall be made. Each euro area NCB whose capital key weighting increases on 1 February 2020 shall make such a payment to the ECB, and the ECB shall make such a payment to each euro area NCB whose capital key weighting decreases on 1 February 2020. The amount of the compensatory payments shall be calculated as follows: the total monetary income for the period from 1 January 2020 until 31 January 2020 transferred to the ECB to cover its loss shall be multiplied by the absolute difference between the relevant euro area NCB’s capital key weighting on 31 January 2020 and its capital key weighting with effect from 1 February 2020 and the result shall be divided by 100. Interest on compensatory payments relating to the NCBs’ monetary income shall accrue from 1 January 2021 until the date these payments are made.

The additional compensatory payments relating to the NCBs’ monetary income, as described in paragraph 6, as well as interest accrued thereon, shall be paid on the second business day after the approval by the Governing Council of the ECB’s annual accounts for the financial year 2020.