ECB revises criteria for accepting bank assets as collateral

The European Central Bank disclosed that it will modify the conditions under which it accepts assets as collateral for lending to banks. It will assess private-sector assets using the second-best rating from external credit agencies and set corresponding haircut cuts. Adjustments also cover unsecured and secured bank bonds, corporate issuances and public securities issued outside the euro area.

The ECB will continue to apply the highest rating for euro-area public sector assets. The temporary, more flexible collateral framework introduced during the COVID-19 crisis will be discontinued, returning to a single, harmonised collateral regime. Additionally, subsidiaries' financial assets will receive the same haircut category as their parent companies, classified under category III and subject to climate-related factors.