The European Central Bank's broad monetary aggregate is M3. This encompasses also two narrower aggregates, M1 and M2.
Euro-area M3 is made up of monetary liabilities of euro-area monetary financial institutions (MFIs) and central government (Debt Management Office) vis-à-vis non-MFI euro-area residents excluding central government, in all currencies:
- currency in circulation (M1)
- overnight deposits (M1)
- deposits with agreed maturity up to two years (M2)
- deposits redeemable at notice up to three months (M2)
- repurchase agreements
- money market fund shares/units and money market paper
- debt securities up to two years.
The estimate of M3 we compile for the UK is made up of monetary liabilities of MFIs in the UK vis-à-vis non-MFI UK residents excluding central government, in all currencies. The UK reporting system does not currently identify the maturity breakdowns used in the euro-area definition. These are therefore estimated.
The euro-area aggregate does not include the adjustments for transit items and the inter-MFI reporting difference, which are made for UK M4. A reconciliation table which illustrates the differences between M4 and this estimate of M3 is available on request.
These data therefore provide an estimate of M3 for the UK. These data replaced the M3H European harmonised aggregate, which was previously published to facilitate international comparisons between EU member states.
M3H comprised the components of M4 plus:
- foreign currency deposits held by the M4 private sector with MFIs in the UK
- sterling and foreign currency deposits held by UK public corporations with MFIs in the UK.
For further information on the compilation of these aggregates see the Statistics article 'Euro area monetary aggregates and their role in the Eurosystem's monetary policy strategy' in the ECB's Monthly Bulletin.