The ECB's definition of euro area monetary aggregates

The ECB's definition of euro area monetary aggregates is based on the following:

Based on conceptual considerations and empirical studies, and in line with international practice, the Eurosystem has defined a narrow aggregate (M1), an "intermediate" aggregate (M2) and a broad aggregate (M3). These aggregates differ with regard to the degree of moneyness of the assets included. Table 1 shows the definitions of the euro area monetary aggregates using the definition of liabilities issued by the MFI sector, as well as by entities belonging to the central government sector (Post Offices, Treasuries) of the euro area. As noted above, these aggregates include only positions of residents in the euro area which are held with MFIs located in the euro area. Holdings by euro area residents of liquid assets denominated in foreign currency can be close substitutes for euro-denominated assets. Therefore, the monetary aggregates include such assets if they are held with MFIs located in the euro area.

Table 1: Definitions of euro area monetary aggregates
Liabilities ( 1 ) M1 M2
( 1 ) Liabilities of the money-issuing sector and central government liabilities with a monetary character held by the money-holding sector.
Currency in circulation X X X
Overnight deposits X X X
Deposits with an agreed maturity up to 2 years   X X
Deposits redeemable at a period of notice up to 3 months   X X
Repurchase agreements     X
Money market fund (MMF) shares/units     X
Debt securities up to 2 years     X