Updates 14 September 2012
The European Central Bank on 2 August 2012 issued a guideline on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral (ECB/2012/18). The Bank of Finland rules for counterparties and customers are amended in accordance with the guideline and decisions by the Governing Council of the ECB.
Section 220.127.116.11 Tender procedures
On 8 December 2011, the Governing Council of the ECB decided that counterparties to monetary policy operations may reduce the amount of, or terminate, certain longer-term refinancing operations before maturity. The section on tender procedures has been supplemented accordingly.
Section 18.104.22.168 Eligibility criteria for marketable assets
As appears from ECB press releases dated 8 December 2011 and 22 June 2012, in addition to asset-backed securities currently eligible for use as collateral, the Eurosystem will consider as eligible asset-backed securities fulfilling specific eligibility criteria and having two ratings of at least triple B. Moreover, each national central bank may accept as collateral certain types of asset-backed securities issued before 20 June 2012. The Bank of Finland will not accept as collateral for central bank credit such asset-backed securities subject to discretionary approval.
The guideline also includes a decision by the Governing Council of the ECB of 21 March 2012 to the effect that a national central bank may decide not to accept as collateral for its credit operations eligible bank bonds guaranteed by a Member State under a European Union/International Monetary Fund programme, or by a Member State whose credit assessment does not comply with Eurosystem requirements for issuers and guarantors of bonds. The Bank of Finland will not accept such bank bonds as collateral for central bank credit.
Section 22.214.171.124 Eligibility criteria for non-marketable assets
According to the ECB’s press release of 8 December 2011, Eurosystem national central banks may accept as collateral additional credit claims that do not satisfy the normal eligibility criteria. The Bank of Finland will not accept such additional credit claims as collateral for central bank credit.
Section 126.96.36.199 Additional requirements for the use of collateral
Collateral use of asset-backed securities fulfilling specific eligibility criteria is prohibited in certain cases involving close links.
According to the decision by the Governing Council of the ECB dated 4 April 2012, a Eurosystem counterparty that uses as collateral an asset-backed security for which it acts as the originator, or if it has close links with the originator, must notify its own central bank of any changes to the asset-backed security that may affect the rating of the security.
The decision by the Governing Council of the ECB dated 3 July 2012 restricts the collateral use of debt instruments issued by the bank itself and guaranteed by an EEA public sector entity with the right to impose taxes and such instruments issued by closely linked entities.
Sections 188.8.131.52 and 184.108.40.206 regarding credit standards
These sections have been specified and supplemented with credit standards for asset-backed securities satisfying specific eligibility criteria and those accepted as collateral on a discretionary basis.
Section 220.127.116.11 Risk control measures for marketable assets
This section has been supplemented with valuation haircuts for asset-backed securities satisfying specific eligibility criteria and those accepted as collateral on a discretionary basis.