ECB widens eligibility criteria for marketable debt instruments as collateral

ECB widens eligibility criteria for marketable debt instruments as collateral

On 17 October 2012, Guideline of the European Central Bank of 10 October 2012 (ECB/2012/23) (2012 Guideline) was published in the Official Journal of the European Union. The 2012 Guideline amends Guideline ECB/2012/18 to temporarily widen the eligibility criteria for marketable debt instruments to be used as collateral in Eurosystem credit operations.

Under section 6.2.1.8 of Annex I to Guideline ECB/2011/14 (2011 Guideline), marketable debt instruments must be denominated in euros in order to be eligible as collateral for Eurosystem credit operations. The 2012 Guideline makes marketable debt instruments denominated in pounds sterling, yen or US dollars temporarily eligible provided that:

  • They are issued and held or settled in the euro area.
  • The issuer is established in the European Economic Area.
  • They fulfil all other eligibility criteria included in section 6.2.1 of Annex I to the 2011 Guideline.

A valuation markdown of 16% will be applied to marketable debt instruments denominated in pounds sterling or US dollars, while a valuation markdown of 26% will be applied to those denominated in yen.

The 2012 Guideline came into force on 12 October 2012. It provides that the changes to eligibility criteria will apply from 9 November 2012 until the ECB considers they are no longer necessary.

Source: Guideline of the European Central Bank of 10 October 2012 amending Guideline ECB/2012/18 on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral (ECB/2012/23).


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