Given that minimum reserves are currently close to € billion, the exempt tier would amount to some € billion, implying that the non-exempt amount of excess reserves still remunerated at the negative deposit facility rate would be approximately € trillion, down from € trillion.
Third, it dampens the risk of money market rates becoming subject to upward pressure due to the potential redistribution of excess liquidity among market participants to fill exemption allowances. For example, the system may induce banks that have an unused exempt tier to increase the amount they borrow from banks that hold more excess liquidity than their exempt tier.