Eligible, marketable and non-marketable assets

The Bank of Greece accepts marketable and non-marketable assets as collateral in monetary policy and intraday credit operations.

Cross-border use of collateral

The Eurosystem’s counterparties may use eligible assets on a cross-border basis, i.e. obtain credit from the national central bank of the Member State in which they are based using assets held in another Member State. These assets may be used on a cross-border basis in the settlement of operations of any nature through which the Eurosystem provides liquidity against collateral in the form of eligible assets.

Correspondent Central Banking Model (CCBM)

For the cross-border use of collateral, the Eurosystem has developed the Correspondent Central Banking Model (CCBM). The main purpose of the CCBM is to ensure that all marketable and non-marketable assets eligible for use in monetary policy operations or to obtain intraday credit in TARGET2 are made available to all Eurosystem counterparties, regardless of where the assets or the counterparty are situated. 

Eurosystem Credit Assessment Framework (ECAF)

The Eurosystem Credit Assessment Framework (ECAF) mitigates the credit risk of collateral used in monetary policy operations, together with appropriate valuation and risk control measures.

The ECAF defines the procedures, rules and techniques which ensure that the Eurosystem requirement of high credit standards for all eligible assets is met.

In addition, the Eurosystem applies greater valuation haircuts to eligible (i.e. high quality) assets which are nevertheless of relatively lower credit quality according to the ECAF, aiming at risk equivalence across all eligible assets.

ECAF Assessment sources

To assess the credit quality of eligible assets, the Eurosystem takes into account information ‒ ratings or probabilities of default ‒ from credit assessment systems belonging to one of the following sources:

  • external credit assessment institutions (ECAIs),
  • national central banks’ in-house credit assessment systems (ICASs),

As from 1 April 2023, the Bank of Greece uses its own in-house credit assessment system (GR ICAS). GR ICAS has been approved by the Governing Council of the European Central Bank (ECB) as an acceptable credit assessment system in line with the Eurosystem’s credit assessment framework (ECAF) for eligible assets (ECAF-accepted system), to replace credit assessments by third-party rating tools (RTs) providers.

  • counterparties’ internal ratings-based (IRB) systems.

It is for the Eurosystem to determine whether an issue, issuer, debtor or guarantor fulfils the Eurosystem’s credit quality requirements on the basis of any information that it may consider relevant for ensuring the adequate risk protection of the Eurosystem.

The full list of credit assessment systems accepted by the Eurosystem is available on the ECB’s website.

Eligible counterparties

Counterparties to the Eurosystem’s monetary policy operations must fulfil certain eligibility criteria. These criteria are uniform and have been designed to:

  1. offer to a broad range of institutions access to monetary policy operations;
  2. ensure equal treatment of institutions across the euro area.

Only institutions  subject to the Eurosystem's minimum reserve system may participate in monetary policy operations, provided that they fulfil certain operational criteria.

Moreover, to be considered financially sound, credit institutions should meet certain prudential supervision requirements.

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