Monetary Policy

Eligible assets and counterparties

Adequate collateral is required for access to all Eurosystem credit operations. Assets that may be used as collateral in monetary policy operations, and for obtaining intraday credit, must fulfil certain eligibility criteria. 

The Eurosystem accepts a wide range of assets that can be used as collateral. A single framework for eligible assets for the entire euro area, also referred to as the "single list", came into effect on 1 January 2007. Only assets that are on the single list may be used as collateral in monetary policy operations or to obtain intraday credit.

This single framework comprises two distinct asset classes:

  • marketable assets, which fulfil the criteria and are known as "eligible assets", are listed on the website of the European Central Bank (ECB);
  • non-marketable assets which fulfil the eligibility criteria, but which are not listed on the ECB website.

The ECB reserves the right to exclude assets from the single list as it deems appropriate. The ECB also ensures that the single list is kept up-to-date, accurate, and consistent.

All eligible assets are also subject to risk control measures to protect the Eurosystem against the risk of financial loss if these assets must be realised owing to default of the counterparty. Apart from protecting the Eurosystem from possible credit risks, eligibility criteria have also been set to ensure equal treatment of all banks. In addition, uniform eligibility criteria promote operational efficiency.

To ensure that banks have full access to central bank liquidity, even in adverse circumstances, the Eurosystem made it possible for national central banks to temporarily accept additional credit claims (ACCs) which do not fulfil the permanent eligibility criteria applicable across the euro area. This temporary extension of the ACC frameworks allows national central banks to include loans backed by COVID-19-related public sector guarantees to corporates, SMEs, self-employed individuals, and households. The rules governing the use of ACCs somewhat differ across countries. Every national central bank is free to set up a country-specific ACC framework, which however must be approved by the Governing Council on the basis of a common minimum risk control framework.

The Governing Council approved an ACC framework proposed by the Central Bank of Malta. Under this framework, the Central Bank of Malta will accept credit claims that fall under the Malta Development Bank's (MDB) COVID-19 Guarantee Scheme (CGS). The CGS is part of a wider Government COVID-19 Response Support Programme. Through guarantees provided by MDB's CGS, businesses facing liquidity shortages as a result of the COVID-19 outbreak, have better access to bank financing. The ACC framework is implemented through CBM's Directive No. 8: Monetary Policy Instruments and Procedures and will be effective as from 1 January 2021.

Apart from being subject to collateral requirements, Eurosystem operations are only undertaken with eligible counterparties that satisfy common requirements applied at euro area level, as well as other specific national conditions. Such counterparties may use eligible assets on a cross-border basis, i.e. they may obtain funds from the national central bank of the Member State in which they are established by making use of assets located in another Member State.