Box 8

ELIGIBLE ASSETS

Eligible assets

6.3.1 SCOPE AND ELEMENTS The Eurosystem credit assessment framework ( ECAF ) defines the procedures , rules and techniques which ensure that the Eurosystem requirement of high credit standards for all eligible assets is met .

to the zero to one year maturity bucket of fixed coupon instruments in the liquidity category to which the instrument is assigned .

ELIGIBILITY SPECIFICATIONS FOR UNDERLYING ASSETS

Eligible assets

Eligible collateral

CROSS BORDER USE OF ELIGIBLE ASSETS

CHAPTER 6 Eligible assets 6.1 .

Information on collateral NCB B Collateral

2.1 Non marketable assets ( bank loans ) Currently , non marketable assets ( including bank loans ) are eligible in six countries .

2 Tier one and tier two assets are subject to the risk control measures specified in Section 6.4 .

Article 11 Eligible assets 1 .

This account can be used for all eligible assets held in Euroclear , i.e. including eligible assets transferred to Euroclear through eligible links .

The standing facilities are administered in a decentralised manner by the national central banks .

This account can be used for all eligible assets held in Euroclear , i.e. including eligible assets transferred to Euroclear through eligible links .

( 2 ) have been established between those SSSs which were assessed by the Eurosystem as being eligible for use in the Eurosystem 's monetary policy and intraday credit operations and ( 3 ) were operational as from 4 January 1999 at the latest .

Eligibility criteria for non marketable assets Two types of non marketable assets are eligible as collateral in the single framework for eligible assets credit claims and non marketable retail mortgage backed debt instruments ( RMBDs ) ( 14 ) .

The volume of potentially eligible non marketable assets therefore cannot easily be measured .

Assets listed , quoted or traded on an accepted non regulated market will be immediately eligible .

Table 4 Eligible assets for Eurosystem monetary policy operations Eligibility criteria Marketable assets ( 1 ) Non marketable assets ( 2 ) Type of asset

Article 8 Eligible collateral 1 .

Legal acts related to the eligibility of collateral

They must be denominated in euro .

Eligibility criteria for non marketable assets Two types of non marketable assets are eligible as collateral in the single framework for eligible assets credit claims and non marketable retail mortgage backed debt instruments ( RMBDs ) ( 4 ) .

Eligible assets General considerations Tier one assets Tier two assets Risk control measures

Eligible assets General considerations Tier one assets Tier two assets Risk control measures

Eligible assets General considerations Tier one assets Tier two assets Risk control measures

This single framework for eligible collateral comprises two distinct asset classes marketable and non marketable assets .

The list of eligible collateral also includes non marketable assets , mostly credit claims ( also referred to as bank loans ) .

Tier two assets are classified in three different haircut groups , reflecting differences in their intrinsic financial characteristics and in their liquidity .

Official Journal of the European Union CHAPTER 6 ELIGIBLE ASSETS

In exceptional circumstances or when required for monetary policy purposes , the ECB may decide to extend CCBM 's closing time until TARGET2 closing time . 6.6.2 LINKS BETWEEN SECURITIES SETTLEMENT SYSTEMS In addition to the CCBM , eligible links between EU SSSs can be used for the cross border transfer of marketable assets .

The lower credit threshold temporarily introduced to expand the list of eligible collateral was also applied to non marketable assets . 102

Eligible assets will be classified as either tier one or tier two assets .

Further temporary expansion of the list of assets eligible as collateral

The model may be used for all eligible assets .

Would counterparties located in those countries in which these assets are currently eligible expect any substantial disadvantage , either now or in the future , if these assets were removed from the list of eligible assets ?

Would counterparties located in those countries in which these assets are currently eligible expect any substantial disadvantage either now or in the future if these assets were removed from the list of eligible assets ?

Valuation principles for underlying assets Cross border use of eligible assets

Article 6 Admission of subordinated assets with adequate guarantees as eligible collateral 1 .

The current procedures for assessing potentially eligible assets are not regarded as transparent and are not easily understood by third parties .

CLASSIFICATION OF ELIGIBLE ASSETS Liquidity categories for tier one assets Eligible tier one assets are to be allocated to one of four categories of decreasing liquidity1

2000X0776 EN 01.03.2010 007.001 38 M5 CHAPTER 6 ELIGIBLE ASSETS 6.1 .