Updates 1 January 2013 and 3 January 2013
Guideline ECB/2011/14 issued by the European Central Bank on monetary policy instruments and procedures of the Eurosystem was amended by Guideline ECB/2012/25. The Bank of Finland's rules for counterparties and customers are amended in accordance with the Guideline and will become effective on 3 January 2013.
Articles 1, 39 and 43 of the Rules for TARGET2-Suomen Pankki will be amended, as from 1 January 2013, in accordance with Guideline ECB/2012/27 issued by the European Central Bank on the TARGET2 system. There will also be updates to Annex VI and Appendix IIA to Annex VIII.
1 Monetary Policy
Rules on monetary policy instruments and procedures (1.2): Annexes 1a and 1b for 2013
The binder has been updated with the indicative calendar for the Eurosystem's tender op-erations (Annex 1a) and the indicative calendar of reserve maintenance periods (Annex 1b) for 2013.
Sections 1.2.5.1.3 and 1.2.5.1.6: An error in the tender announcement or tender result empowers the ECB to take the necessary action
Sections 1.2.5.4 and Annex 4 to the Rules on monetary policy instruments and procedures: Changes to the definition of financial penalties for infringement of counterparty obligations
Amendments and specifications have been made to the definition of financial penalties for infringement of rules related to tender operations, bilateral transactions, the use of underlying assets and the rules for end-of-day procedures or for access to the marginal lending facility. Accordingly, the examples of the calculation of financial penalties in Annex 4 have also been updated.
2 TARGET 2 -Suomen Pankki
Section 2.2 Rules for TARGET2-Suomen Pankki
The definition of Article 1 on events of default has been specified in respect of participants entitled to access intraday credit where the eligibility of the participant as a counterparty for Eurosystem monetary policy operations has been suspended or terminated. A corresponding mention was added to Article 39 of the Rules.
Annex VI defines the new monthly fees for PM accounts and specifies the pricing for registration of addressable BIC codes. Appendix IIA to Annex VIII includes the increase in the monthly fee for direct participants' internet-based access.
3 Collateral
Section 3.2.1.2: Eligibility criteria tightened to some extent
- The range of eligible coupon structures for underlying assets has been reduced.
- The cover pool of covered bonds issued by banks must not contain asset-backed securities, with certain exceptions.
- The pool of assets underlying asset-backed securities must be homogeneous and may include residential mortgages, commercial real estate mortgages, loans to small- and medium-sized enterprises, auto loans, consumer finance loans or leasing receivables. Loan-level data on the pool of assets underlying asset-backed securities will need to be submitted to a repository designated by the Eurosystem.
Section 3.2.1.4: Some changes to the use of collateral
- The Bank of Finland may decide not to accept debt instruments falling due, or with income flow occurring, in the immediate future.
- A bank using as collateral an asset-backed security for which it also acts as the originator must inform the Bank of Finland of such changes to the security that may affect the security's rating. The section includes examples of these changes.
- A bank may use as collateral a covered bond that it has issued itself if the bond is is-sued in accordance with the criteria set out in Part 1, points 68 to 70 of Annex VI to Directive 2006/48/EC (relating to the taking up and pursuit of the business of credit institutions, recast).
Section 3.2.1.9: A change to reporting concerning external credit assessment institutions
External credit assessment institutions and rating tool providers must submit a signed certification from the CEO, or a corresponding signatory, confirming the accuracy and validity of the performance monitoring information provided to the Eurosystem.
Section 3.2.1.10: A change to reporting concerning banks' internal ratings based methods
Banks using internal ratings based methods for collateral, must report annually to the Bank of Finland information on all entities that satisfy the credit quality threshold, including assessed and observed default rates, industry sector and the name of the credit assessment model used.
Section 3.2.3.2: The table of haircuts applied to inverse floating rate debt instruments has been deleted.
Section 3.2.3.4: The text concerning the pricing of collateral has been specified.
Section 3.2.3.5: Financial sanctions
Changes and specifications have been made to the definition of financial sanctions caused by infringements of rules for the use of collateral.