Published online: September 2024 The European Central Bank (ECB) announced on 13 March 2024 that it would adopt a new ‘operational framework’ for controlling monetary policy. That decision was necessary because the ECB is allowing the assets it purchased and accepted as collateral in exchange for long-term refinancing operations to mature or be returned to the market. With a shrinking balance sheet, the ECB needs to change its relationship with the banking system. It will also change its relationship with non-bank financial institutions and with the financial markets for public and private securities. This transformation is not immediate. The major consequences will start to be felt only in 2026 or 2027. But it is imminent. As the collective balance sheet of the central banks that participate in the euro as a common currency, the Eurosystem, falls from just under €6.5 trillion today to something just over €3 trillion in 2026-2027, the ECB must find a new way to set monetary policy while at the same time preserving financial stability. The first major step took place on 12 September 2024 with a realignment of the ECB’s main policy rates. Important questions about future steps remain to be addressed.