ECB Updates Monetary Policy Guidelines to Ensure Risk Protection
The European Central Bank (ECB) has revised its monetary policy implementation guidelines to ensure consistency and risk protection. The changes, which take effect on November 30th, 2026, will impact how collateral is valued for Eurosystem monetary policy operations.
According to the ECB's revisions, the second-best rating from external credit assessment institutions (ECAIs) will now be used to determine the eligibility of private sector assets as collateral. This change applies to unsecured bank bonds, covered bank bonds, and assets from non-financial corporations and the non-euro area public sector.
The ECB has also updated its haircut schedule to reflect more refined haircuts for own-used or retained assets and finer granularity for individual credit claims by considering each claim's amortisation type. Additionally, financial subsidiaries of non-financial corporate issuer groups will now be assigned to the same haircut category as non-financial corporations, under certain conditions.