Collateral
ECB relaxes collateral eligibility rules
Broader range of lower quality assets now acceptable under ECB collateral rules; move should help Spanish banks after results of stress test reveal a potential €62 billion capital shortfall
UK ‘catching up’ on collateral eligibility, say CBP panellists
Central Banking ON AIR event sees discussion of central bank decisions to extend collateral eligibility; panellists stress diversification should be executed with care in non-crisis times
UK credit and liquidity schemes met with uncertainty
BoE and government announce plans to improve credit and liquidity picture in UK; banks’ shares rise but questions remain on effectiveness of plans
HKMA unveils new phase of cross-border settlement platform
Hong Kong and Malaysian central banks to add cross-border collateral management service to settlement platform to promote growth in 'underdeveloped' Asian repo markets
Collateral eligibility: the ultimate macro-prudential policy weapon?
The most potent policy weapon at the disposal of central banks when it comes to fulfilling macro-prudential supervision are asset eligibility rules, says William Allen
Euro crisis drives up use of collateral in OTC derivatives, finds survey
Trouble in the eurozone increased use of collateral in over-the-counter derivatives market, according to trade association survey
IMF working paper discusses cashflow sensitivity since financial crisis
IMF research links firms' cashflow sensitivity and their ability to use physical assets as collateral since the financial crisis
BoE’s Fisher calls for central banks to bulk up risk management capabilities
Paul Fisher explains benefits of central banks doing independent credit assessment when evaluating collateral; says risk management functions need to be ‘bigger’ in central banks
New CRD IV draft exempts sovereign trades from CVA capital charge
The latest council draft adds a CVA capital charge exemption for sovereign derivatives transactions – potentially removing one of the big unintended consequences of CRD IV, participants say
ECB rejects Greek bonds in reaction to rating cut
European Central Bank temporarily stops accepting Greek debt as collateral; move comes one day after rating agency drops country to a selective default rating
Balance sheet lessons from the Bank of Japan
The Bank of Japan has expanded its balance sheet in more ways than any of its developed world peers. Hisashi Harui reviews the unconventional approaches it has used to ensure financial stability
Malaysian and Thai central banks agree deeper cooperation
Bank Negara Malaysia and the Bank of Thailand sign agreement to facilitate a cross-border collateral arrangement for eligible financial institutions in the countries
IMF researchers label asset managers collateral ‘mines’
Paper highlights lack of attention paid to rise of asset managers as a major source of funding for banks through shadow banking system
Banque de France outsources collateral management
French central bank agrees collateral management deal with Euroclear France; entire French banking community will use new system next year
Video: Banks can arbitrage central bank liquidity provision
A conflict between new liquidity regulations under Basel III and existing central bank operations leaves a gap that banks may be able to exploit, warns financial stability expert
Bank of Finland research on moral hazard effect of collateralised loans
Bank of Finland study examines effects on moral hazard when collateral values fluctuate
ECB sets stage to tackle ‘addicted banks’
European Central Bank publishes toughened rules that will allow it to limit individual banks’ access to short-term funds and exclude asset classes
Bank of Canada: central banks prefer higher haircuts
Bank of Canada study shows haircuts on collateralised assets is greater when central banks cannot lend exclusively to illiquid institutions
IMF on link between collateralised borrowing and systemic risk
Fund study says rapid declines in the value of bank collateral can cause systemic risks
ECB’s González-Páramo highlights flaws in collateral framework
European Central Bank executive board member José Manuel González-Páramo acknowledges risks in central bank’s willingness to accept broad range of collateral
Denmark shoots down covered bonds idea
Danish governor argues against reforms to adjust requirements on covered bond collateral but concedes change is necessary
Bank mulls widening collateral pool
Bank of England consults on taking “raw loans” at its discount window facility and calls for more transparency from counterparties, says the move will cement confidence in the financial system
Norway puts rate rises on ice
Pause in exit strategy as recovery “takes hold”, inflation likely to fall
Norges Bank reverses emergency collateral rules
Norway’s central bank tightens collateral guidelines with immediate effect, proposes end to acceptance of bank bonds