Net positions arising from securities lending without cash collateral .

remained part of the portfolio from which they were sold .

The balance sheet shows the deposits and the value of the securities used as collateral .

Correspondent banking an arrangement under which one bank provides payment and other services to another bank .

( k ) claims under reverse repos or securities borrowing against cash collateral Counterpart of cash paid out in exchange for securities purchased by reporting agents , or securities borrowing against cash collateral , see liability item 9.4

Securities issued before or on that date will continue to be eligible for use as collateral throughout their lifetime .

New procedures for the transfer of securities used as collateral for Eurosystem credit operations

In the CCBM , NCBs act as custodians for one another . This means that each NCB has a securities account in its securities administration for each of the other NCBs and the European Central Bank .

Relative to the overall eligible amount , government issues and corporate securities were underproportionally used as collateral in credit operations with the Eurosystem .

Once the home central bank has been informed by the correspondent central bank that the securities have been received , it will add these securities to the pool account of the counterparty .

In exceptional circumstances or when required for monetary policy purposes , the ECB may decide to extend the closing time of the CCBM until the closing time of TARGET .

Once the home central bank has been informed by the correspondent central bank that the securities have been received , it will add these securities to the pool account of the counterparty .

Once the home central bank has been informed by the correspondent central bank that the securities have been received , it will add these securities to the pool account of the counterparty ,

Standard 3 focuses on the security of collateral held in custody and states that SSSs should have adequate safeguards to protect NCBs against custodial risk , for instance when third party depositories are used .

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

Credit institution i ) an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credit for its own account or ii ) an undertaking or any other legal person , other than those under i ) , which issues means of payment in the form of electronic money .

Reverse transactions ( including security lending transactions ) conducted under an automated security lending programme are recorded with effect on the balance sheet for such transactions only where collateral is provided by the borrower in the form of

Asset backed securities 23 .

A reverse sale and repurchase agreement ( reverse repo ) is a contract under which a holder of cash agrees to the purchase of an asset and , simultaneously , agrees to re sell the asset for an agreed price on demand , or after a stated time , or in the event of a particular contingency .

A Spanish bank wishes to obtain credit from the Banco de España ( the Spanish central bank ) on the basis of collateral that it holds in the Italian central securities depository ( Monte Titoli ) .

Example A Spanish bank wishes to obtain credit from the Banco de España ( the Spanish central bank ) on the basis of collateral that it holds in the Italian central securities depository ( Monte Titoli ) .

Amounts received in exchange for securities temporarily transferred to a third party in the form of bond lending ( against cash collateral ) .

A Spanish bank wishes to obtain credit from the Banco de España ( the Spanish central bank ) on the basis of marketable assets that it holds in Monte Titoli , the Italian central securities depository ( CSD ) .

This starts with ensuring price stability.

The list of eligible instruments was extended during 2009 to include certain governmentguaranteed securities which comply with the ECB 's eligibility criteria for its own funds portfolio .

ELIGIBLE LINKS BETWEEN NATIONAL SECURITIES SETTLEMENT SYSTEMS Cross border collateral can also be mobilised by using links between national SSSs .

Once the securities have been transferred via such links to another SSS , they can be used through local procedures in the same way as any domestic collateral .

In 2003 this instrument was used to receive their views on issues related to payment and securities settlement systems , as well as to the collateral framework of the Eurosystem ( see Chapter 2 ) .

The MFI issues asset backed securities .

These agreements to sell are recorded on the asset side of the balance sheet , but are not included in the ECB 's security holding and give rise to interest income in the profit and loss account .

These markets are known as secured markets since lending is done against assets acting as collateral .

The trend in private interbank markets towards secured lending has also augmented counterparties needs for collateral .

Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares Securities other than shares

Once eligible securities have been transferred via such links to another SSS , they can be used through local procedures in the same way as any domestic collateral .

In a pooling system , the counterparty is at any time able to provide the correspondent central bank with securities for the account of the home central bank .

When the counterparties foresee a need to use the CCBM late in the day , they should , where possible , deliver the assets in advance ( i.e. pre deposit the assets ) .

In a pooling system , the counterparty is able at any time to provide the correspondent central bank with securities for the account of the home central bank .

The means of evidence already in place concerning the provision of book entry securities or cash as collateral are inadequate when applied to credit claims .

On the securities settlement side , the Eurosystem and the market offer various channels to facilitate the use of collateral across national borders .

In a pooling system , the counterparty is able at any time to provide the correspondent central bank with securities for the account of the home central bank .

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Sometimes a repo transaction is agreed via a third party ( triparty repo ) . Reverse transaction an operation whereby the central bank buys ( reverse repo ) or sells ( repo ) assets under a repurchase agreement or conducts credit operations against collateral .

Real estate collateral

Floating charge

Securities Non ( other MFIs than shares ) Securities ( other than shares ) Securities Non ( other MFIs than shares ) Securities Non ( other MFIs than shares ) Securities Non ( other MFIs than shares ) Securities Non ( other MFIs than shares ) Securities ( other than shares )