Home Europe European Central Bank Guideline (EU) 2024/1164 of the European Central Bank of 8 F...
Date: 26-Apr-2024 Category: Not Applicable State: Union Government Country: Europe

Guideline (EU) 2024/1164 of the European Central Bank of 8 February 2024 amending Guideline (EU) 2016/65 on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework (ECB/2015/35) (ECB/2024/5)

Issued by European Central Bank · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • This is a guideline issued by the European Central Bank (ECB) amending Guideline (EU) 2016/65 (ECB/2015/35) on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework.
  • The amendment clarifies the valuation haircut treatment of debt certificates that may be issued by the ECB and debt certificates issued by NCBs prior to the date of adoption of the euro in their respective Member State.

Key Changes

  • No valuation haircut shall be applied to ECB debt certificates and debt certificates issued by NCBs prior to the date of adoption of the euro in their respective Member State.
  • Debt instruments issued by central governments, debt instruments issued by the European Union and debt certificates issued by national central banks of Member States whose currency is not the euro are included in haircut category I.
  • Table 1 in the Annex to Guideline (EU) 2016/65 (ECB/2015/35), which specifies haircut categories for eligible marketable assets, has been replaced.

Impact Analysis

National Central Banks (NCBs)

  • NCBs need to update their internal documentation and systems to reflect the changes in haircut categories.

Credit Institutions and Other Market Participants

  • The Eurosystem risk control framework is regularly reviewed to ensure adequate protection.

European Central Bank (ECB)

  • The ECB is responsible for regularly reviewing the Eurosystem risk control framework.

Key Entities Referenced

European Central Bank (ECB): The central bank of the Eurozone. National Central Banks (NCBs): The national central banks of the Member States whose currency is the euro. Eurosystem: The monetary authority of the Eurozone, comprising the ECB and the NCBs. Guideline (EU) 2016/65 (ECB/2015/35): Guideline on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework. Guideline (EU) 2015/510 (ECB/2014/60): Guideline on the implementation of the Eurosystem monetary policy framework (General Documentation Guideline).
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Official Journal EN of the European Union L series 2024/1164 26.4.2024 GUIDELINE (EU) 2024/1164 OF THE EUROPEAN CENTRAL BANK of 8 February 2024 amending Guideline (EU) 2016/65 on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework (ECB/2015/35) (ECB/2024/5) THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK, Having regard to the Treaty on the Functioning of the European Union, and in particular the first indent of Article 127(2) thereof, Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular the first indent of Article 3.1, Articles 9.2, 12.1, 14.3 and 18.2 and the first paragraph of Article 20 thereof, Whereas: (1) In accordance with Article 18.1 of the Statute of the European System of Central Banks and of the European Central Bank, the European Central Bank (ECB) and the national central banks of the Member States whose currency is the euro (hereinafter the ‘NCBs’) may conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. The general conditions under which the ECB and the NCBs stand ready to enter into credit operations, including the criteria determining the eligibility of collateral for the purposes of Eurosystem credit operations, are laid down in Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60)(1). (2) All eligible assets for Eurosystem credit operations are subject to specific risk control measures in order to protect the Eurosystem against financial losses in circumstances in which the collateral has to be realised due to an event of default of a counterparty. The Eurosystem risk control framework is regularly reviewed in order to ensure adequate protection. Amendments are warranted to clarify the valuation haircut treatment of debt certificates that may eventually be issued by the ECB. (3) Therefore, Guideline (EU) 2016/65 of the European Central Bank (ECB/2015/35)(2)should be amended accordingly, HAS ADOPTED THIS GUIDELINE: Article 1 Amendments Guideline (EU) 2016/65 (ECB/2015/35) is amended as follows: (1) in Article 1, the following paragraph 3 is added: ‘3. No valuation haircut shall be applied to ECB debt certificates and debt certificates issued by NCBs prior to the date of adoption of the euro in their respective Member State whose currency is the euro.’; (2) in Article 2, point (a) is replaced by the following: ‘(a) debt instruments issued by central governments, debt instruments issued by the European Union and debt certificates issued by national central banks of Member States whose currency is not the euro are included in haircut category I;’; (3) the Annex is amended in accordance with the Annex to this Guideline. (1) Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (General Documentation Guideline) (ECB/2014/60) (OJ L 91, 2.4.2015, p. 3). (2) Guideline (EU) 2016/65 of the European Central Bank of 18 November 2015 on the valuation haircuts applied in the implementation of the Eurosystem monetary policy framework (ECB/2015/35) (OJ L 14, 21.1.2016, p. 30). ELI: http://data.europa.eu/eli/guideline/2024/1164/oj 1/3EN OJ L, 26.4.2024 Article 2 Taking effect and implementation 1. This Guideline shall take effect on the day of its notification to the NCBs. 2. The NCBs shall take the necessary measures to comply with this Guideline and apply them from 6 May 2024. They shall notify the European Central Bank of the texts and means relating to those measures by 22 March 2024at the latest. Article 3 Addressees This Guideline is addressed to the NCBs. Done at Frankfurt am Main, 8 February 2024. For the Governing Council of the ECB The President of the ECB Christine LAGARDE 2/3 ELI: http://data.europa.eu/eli/guideline/2024/1164/ojEN OJ L, 26.4.2024 ANNEX In the Annex to Guideline (EU) 2016/65 (ECB/2015/35) Table 1 is replaced by the following: ‘Table 1 Haircut categories for eligible marketable assets based on the type of issuer and/or type of asset Category I Category II Category III Category IV Category V Debt instruments issued Debt instruments issued Debt instruments issued Unsecured debt instru­ Asset-backed securities’ by central governments by local and regional by non-financial cor­ ments issued by credit Debt instruments issued governments porations, corporations institutions and agencies by the European Union Debt instruments issued in the government sector which are credit institu­ Debt certificates issued by by entities (credit insti­ and agencies which are tions that do not meet national central banks of tutions or non-credit non-credit institutions the quantitative criteria Member States whose institutions) classified by that do not meet the set out in Annex XIIa to currency is not the euro the Eurosystem as agen­ quantitative criteria set Guideline cies and which meet the out in Annex XIIa to (EU) 2015/510 quantitative criteria set Guideline (ECB/2014/60) out in Annex XIIa to (EU) 2015/510 Unsecured debt instru­ Guideline (ECB/2014/60) ments issued by financial (EU) 2015/510 corporations other than (ECB/2014/60) credit institutions Debt instruments issued by multilateral develop­ ment banks and inter­ national organisations other than the European Union Legislative covered bonds Multi cédulas ELI: http://data.europa.eu/eli/guideline/2024/1164/oj 3/3

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