ECB Collateral Changes

September 21, 2011

Today the ECB surpirsed everyone with changes to it’s rules of egilible collateral. The following things were changed:

First, the Eurosystem has abolished the eligibility requirement (Sections 6.2.1.5 and 6.2.1.6) that debt instruments issued by credit institutions, other than covered bank bonds, are only eligible if they are admitted to trading on a regulated market.

So in plain English: The ECB now also accepts any debt instrument issued by banks even though they are not traded on regulated market and thus do not come with a market price. This is a mayor relaxation of colleteral standards. Cynics might claim that markt-to-fanansy enters the Euro monetary system. Den Rest des Beitrags lesen »


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