On October 5, 2016, the European Central Bank ("ECB")
stated that it will be making changes to its collateral framework
by revising the collateral eligibility criteria and risk control
measures in relation to senior unsecured debt instruments issued by
credit institutions or investment firms (unsecured bank bonds or
Under the current rules, UBBs will, except for these new
changes, become ineligible on January 1, 2017. The ECB’s
revisions to its collateral framework are aimed at temporarily
maintaining the eligibility of UBBs (including the eligibility of
statutorily subordinated UBBs that are not also contractually
subordinated), beyond January 1, 2017.
Furthermore, UBBs will also be subject to additional risk
control measures to remain eligible. The ECB has decided to reduce,
as of January 1, 2017, the usage limit for uncovered bank bonds
from 5% to 2.5%. The reduction will not apply where:
the value of such assets is equal to or less than €50
million (net of any applicable haircut); or
such assets are guaranteed (by a public sector entity that has
the right to levy taxes) by way of a guarantee that complies with
the provisions of Article 114 of the ECB Guideline on the
implementation of the Eurosystem monetary policy framework.
The changes are expected to come into effect from January 1,
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
With corporate data security breaches on the rise, the NYDFS has adopted rules requiring financial institutions to take certain measures to safeguard their data and inform state regulators about cybersecurity incidents.
The United States District Court for the Southern District of Florida granted preliminary approval of a nearly $31 million FACTA class action settlement against Doctor's Associates, Inc., doing business as...
The New York State Department of Financial Services recently promulgated cyber regulations for financial institutions that are likely to increase the risks to directors & officers, resulting in an increase in claims.
One of the regulatory pillars of the EMIR is the requirement for parties to collateralize the marked-to-market exposure in over-the-counter derivatives transactions that are not cleared by a central clearing system.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).