ECB Makes Further Change To Collateral Rules For ECB Ops

Author: Market News International | Category: News

FRANKFURT (MNI) – The European Central Bank Governing Council on
Tuesday adopted a further change to ECB rules on the eligibility of
collateral for Eurosystem refinancing operations.

In its preamble to the new rule, the Governing Council said
“counterparties participating in Eurosystem credit operations should be
allowed to increase current levels of own-use of government-guaranteed
bank bonds subject to the ex-ante approval of the Governing Council in
exceptional circumstances.”

As a result, the Governing Council adopted the following change to
its collateral rules, effective immediately:

“The following Article 4b is inserted in Decision ECB/2011/25:

Acceptance of government-guaranteed bank bonds

1. Counterparties that issue eligible bank bonds guaranteed by an
EEA public sector entity with the right to impose taxes may not submit
such bonds or similar bonds issued by closely linked entities as
collateral for Eurosystem credit operations in excess of the nominal
value of these bonds already submitted as collateral on the day this
Decision enters into force.

2. In exceptional cases, the Governing Council may decide on
derogations from the requirement laid down in paragraph 1. A request for
a derogation shall be accompanied by a funding plan.”

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com

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