Tender procedure

In the context of monetary policy, a measure by which the central bank provides liquidity to or absorbs liquidity from the market on the basis of competing bids from counterparties. – The bids most favorable to the central bank are given priority until the total amount of liquidity to be injected or absorbed by the central bank is reached. – The Deutsche Bundesbank conducts the bidding process for German institutions in the Open Market Tender Operations System (OMTOS) on behalf of the ECB. Currently, around 800 banks in Germany that are electronically networked with the Deutsche Bundesbank can submit bids via OMTOS. – In principle, it is possible to bid several sums at different interest rates. Whoever bids the highest interest rate will then be allocated the most money. However, the ECB reserves the right to introduce maximum bid amounts. – See auction, bid-to-cover ratio, money market operations, maximum bid amount, maximum bid rate, market, auction-determined, quantity tender, minimum bid rate, open market tender operations system, stealth policy, tender, underbidding, full allotment, interest rate tender, allotment rate, marginal, allotment procedure, twelve-month tender. – See the results of the ECB’s tender operations in the annex “Euro area statistics,” section “Monetary statistics” in the respective ECB Monthly Bulletin, ECB Monthly Bulletin July 2000, pp. 39 ff (general explanatory notes).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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