The Bank of Finland rules on monetary policy operations and collateral have been updated, and they now include ECB updates to the Guideline on the implementation of the Eurosystem monetary policy framework (ECB/2016/31), the Guideline on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework (ECB/2016/32) and the Guideline on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral (ECB/2016/33).
Unsecured debt instruments subject to statutory subordination issued by credit institutions will be eligible as collateral for Eurosystem credit operations as from 1 January 2017. At the same time, the use of these debt instruments as collateral will be restricted at issuer level to 2.5% (previously 5%) relative to the total value of the assets used as collateral by the counterparty.
Coupon structures with negative cash flows will be allowed for marketable assets as from 1 January 2017.
In respect of non-marketable credit claims, counterparties must ensure exclusion of the debtor’s set-off opportunity when the promissory note is issued in the form of an ordinary promissory note. This amendment will enter into force on 1 January 2018.
With effect from 1 July 2017, credit rating agencies will be required to publish new issue and surveillance reports on covered bonds eligible as collateral within the Eurosystem’s collateral framework.
In addition to these amendments, the tables for haircuts, among other things, have also been updated.