ECB to stop accepting some govt-backed bank bonds as collateral
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FRANKFURT (Reuters) - The European Central Bank said on Friday, March 22, that it would stop accepting some government-guaranteed bank bonds as collateral against which it lends money to banks from March 2015.
"As of March 1, 2015, the use as collateral in eurosystem monetary policy operations of uncovered government-guaranteed bank bonds that have been issued by the counterparty itself or an entity closely linked to that counterparty" will be prevented, said the ECB.
Up until that time, banks can submit such bonds as collateral up to the nominal value of the bonds, it said.
It added that individual national central banks under the ECB's umbrella can reject eligible uncovered government-guaranteed bank bonds as collateral only if they have been rejected by the bank itself and do not comply with the minimum credit rating threshold.
