Collateral

Korea cuts by 75bp on signs of slowdown

The Bank of Korea on Monday slashed its key rate by 75 basis points in a surprise move to counter an economic slowdown. The central bank also broadened its collateral rules to include some mortgage-backed securities on signs of a liquidity shortage.

Trichet: joint action sets precedent

Monday's decision to provide broad access to liquidity and unlimited dollar funding marked a "world premiere" in exceptionally-confident cooperation between central banks, Jean-Claude Trichet, the president of the European Central Bank (ECB), has noted.

A mix of the old and new for central banks

While leading central banks around the world on Monday took similar steps to those seen in recent months to inject liquidity into fear-ridden money markets, the American authorities' response to the latest shocks signals a distinct shift in policy.

ECB to revisit collateral rules - Mersch

The European Central Bank (ECB) will change the rules regarding its money-market operations soon amid fears that financial institutions are taking advantage of the wide range of collateral it accepts to obtain funding.

Fed's Warsh: we would take covered bonds

Highly rated, high-quality covered bonds would generally fall within the range of collateral acceptable at the Federal Reserve's discount window, said Kevin Warsh, a governor at the Federal Reserve Board.

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