ECB is considering doubling minimum reserves for banks

However, the ECB Governing Council has not yet officially discussed the proposal. A spokesman for the central bank declined to comment.

The move would reduce interest payments to institutions

Such a step would help central banks in liquidity-rich countries like Germany to reduce losses from interest on excess reserves. These had grown to trillions as a result of the bond purchase programs of the past decade. The ECB and the 21 national central banks in the euro zone currently pay 2.25 percent interest on excess liquidity of around 2.16 trillion euros, which means annual expenditure of around 48.7 billion euros. Doubling the interest-free minimum reserve would reduce this interest burden by almost four billion euros.

Costs recently rose after the ECB raised the deposit rate from two to 2.25 percent this month to curb inflation caused by the Iran war. High central bank losses are considered politically sensitive because they put a strain on distributions to government budgets. The minimum reserve was reduced from two to one percent at the height of the euro debt crisis in 2012.