Eurosystem Balance Sheet Falls to 5.94 Trillion Euros as Bond Portfolios Run Down
The Eurosystem balance sheet stood at 5,941.2 billion euros on 31 July, down 2.8 billion on the week, the European Central Bank reported in the consolidated financial statement it published on 4 August. Securities held for monetary policy purposes fell 10.8 billion euros to 3,388.0 billion, entirely through redemptions, with no purchases recorded in any programme.
| Item | 31 July 2026, billion euros | Change on the week |
| Total assets | 5,941.2 | minus 2.8 |
| Securities held for monetary policy purposes | 3,388.0 | minus 10.8 |
| Gold and gold receivables | 1,232.9 | unchanged |
| Banknotes in circulation | 1,637.5 | plus 2.2 |
| Base money | 3,960.5 | plus 0.7 |
| Net position in foreign currency | 348.1 | minus 0.2 |
The programme detail shows the run-off is concentrated in the two large public-sector portfolios.
| Programme | Holdings, billion euros | Redemptions in the week, billion euros |
| Public sector purchase programme | 1,681.8 | 6.3 |
| Pandemic emergency purchase programme | 1,294.7 | 4.3 |
| Corporate sector purchase programme | 218.2 | none |
| Third covered bond purchase programme | 191.3 | 0.2 |
| Asset-backed securities purchase programme | 2.0 | none |
Base money, which the bank defines as banknotes in circulation plus current accounts under the minimum reserve system plus the deposit facility, rose 0.7 billion euros to 3,960.5 billion. The composition moved more than the total: current accounts rose 27.1 billion euros and banknotes 2.2 billion, while the deposit facility fell 28.6 billion. Lending to euro area credit institutions related to monetary policy operations rose 5.0 billion euros to 36.2 billion, of which main refinancing operations accounted for 21.9 billion and longer-term operations 14.2 billion.
The longer view is the more informative one. Against the statement as at 1 August 2025, total assets are down 167.6 billion euros, or about 2.7 percent, while securities held for monetary policy purposes are down 540.9 billion euros, or about 13.8 percent, our calculation from the bank’s own weekly series. The gap between those two rates is explained by two offsetting items: gold and gold receivables are up 260.4 billion euros over the year, about 26.8 percent on quarterly revaluation, and banknotes in circulation are up 44.3 billion. On our reading, the portfolio run-off is proceeding considerably faster than the headline balance-sheet decline suggests, with a rising gold valuation masking much of it.
Policy rates were unchanged over the reference week. The deposit facility stands at 2.25 percent, the main refinancing rate at 2.40 percent and the marginal lending facility at 2.65 percent, last changed by a 25 basis point increase decided on 11 June and effective from 17 June, and left unchanged at the Governing Council meeting of 23 July. At that meeting the Governing Council stated that the asset purchase programme and pandemic emergency purchase programme portfolios are declining at a measured and predictable pace, with maturing principal no longer reinvested.
Why it matters: the weekly statement is where the Eurosystem’s stated policy of passive run-off is actually observable. A zero-purchase, redemption-only week is the mechanism working exactly as described, and the roughly 13.8 percent annual contraction in the monetary policy portfolios is the quantitative tightening that sits underneath the rate decisions rather than beside them. For Gulf institutions holding euro-denominated debt, the relevant point is supply: as the Eurosystem steps back from reinvestment, a larger share of euro area sovereign issuance must be absorbed by private buyers, which over time supports term premia independently of where the deposit rate settles.
Looking ahead: the next consolidated statement is due on 11 August, covering the week to 7 August. The next quarterly revaluation of gold, foreign exchange and securities falls into the statement as at 2 October, which is when the gold line will next move.
Sources: European Central Bank.
