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The use of credit claims as collateral for Eurosystem credit operations

Author

Listed:
  • Tabakis, Evangelos
  • Tamura, Kentaro
Abstract
Credit claims (or bank loans) represent a large share of the collateral accepted by the Eurosystem in its credit operations in recent years. Hence the techniques and procedures used in the use of credit claims as collateral have become significant elements of the monetary policy implementation mechanism in the euro area. The procedures involved in credit claim collateralisation, however, are generally more complex than those for marketable assets traded in regulated markets or in other markets accepted by the Eurosystem. While several types of credit claims are eligible as Eurosystem collateral, each type of credit claim has different characteristics which require specific considerations in the eligibility assessment. This paper provides an overview of the issues involved in the use of credit claims as collateral and relates these to some measures taken by both the public and the private sector aimed at facilitating their use in the euro area. The paper also elaborates on the syndicated loan market in the euro area as this market is sizeable, while it appears that the use of such loans as collateral remains limited. JEL Classification: E58, G30

Suggested Citation

  • Tabakis, Evangelos & Tamura, Kentaro, 2013. "The use of credit claims as collateral for Eurosystem credit operations," Occasional Paper Series 148, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2013148
    Note: 336357
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp148.pdf
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    References listed on IDEAS

    as
    1. Amir Sufi, 2007. "Information Asymmetry and Financing Arrangements: Evidence from Syndicated Loans," Journal of Finance, American Finance Association, vol. 62(2), pages 629-668, April.
    2. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah Sabine & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    3. Blaise Gadanecz, 2004. "The syndicated loan market," BIS Quarterly Review, Bank for International Settlements, December.
    4. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah S. & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Jean‐Stéphane Mésonnier & Charles O'Donnell & Olivier Toutain, 2022. "The Interest of Being Eligible," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(2-3), pages 425-458, March.
    2. Pia Hüttl & Matthias Kaldorf, 2022. "Real Effects of Financial Market Integration: Evidence from an ECB Collateral Framework Change," Discussion Papers of DIW Berlin 2012, DIW Berlin, German Institute for Economic Research.
    3. Bindseil, Ulrich & Corsi, Marco & Sahel, Benjamin & Visser, Ad, 2017. "The Eurosystem collateral framework explained," Occasional Paper Series 189, European Central Bank.
    4. Cassola, Nuno & Koulischer, François, 2019. "The collateral channel of open market operations," Journal of Financial Stability, Elsevier, vol. 41(C), pages 73-90.
    5. Jean Barthélémy & Vincent Bignon & Benoît Nguyen, 2017. "Monetary policy, illiquid collateral and bank lending during the European sovereign debt crisis," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 494-495-4, pages 111-130.
    6. Sven Steinkamp & Aaron Tornell & Frank Westermann, 2017. "The Euro Area's Common Pool Problem Revisited: Has the Single Supervisory Mechanism Ameliorated Forbearance and Evergreening," CESifo Working Paper Series 6670, CESifo.
    7. Paolo Fegatelli, 2019. "Central bank digital currencies: The case of universal central bank reserves," BCL working papers 130, Central Bank of Luxembourg.
    8. Cahn, Christophe & Duquerroy, Anne & Mullins, William, 2017. "Unconventional Monetary Policy and Bank Lending Relationships," SocArXiv vgk25, Center for Open Science.
    9. Sergio Gavilá & Alfredo Maldonado & Antonio Marcelo, 2020. "The Banco de España in-house credit assessment system," Financial Stability Review, Banco de España, issue Spring.
    10. Sergio Gavilá & Alfredo Maldonado & Antonio Marcelo, 2020. "The Banco de España in-house credit assessment system," Financial Stability Review, Banco de España, issue Spring.
    11. Laura Auria & Markus Bingmer & Carlos Mateo Caicedo Graciano & Clémence Charavel & Sergio Gavilá & Alessandra Iannamorelli & Aviram Levy & Alfredo Maldonado & Florian Resch & Anna Maria Rossi & Stepha, 2021. "Overview of central banks’ in-house credit assessment systems in the euro area," Occasional Papers 2131, Banco de España.
    12. Laura Auria & Markus Bingmer & Carlos Mateo Caicedo Graciano & Clémence Charavel & Sergio Gavilá & Alessandra Iannamorelli & Aviram Levy & Alfredo Maldonado & Florian Resch & Anna Maria Rossi & Step, 2021. "Overview of central banks’ in-house credit assessment systems in the euro area," Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) 13, Bank of Italy, Directorate General for Markets and Payment System.
    13. Jean Barthélémy & Vincent Bignon & Benoît Nguyen, 2017. "Illiquid Collateral and Bank Lending during the European Sovereign Debt Crisis," EconomiX Working Papers 2017-21, University of Paris Nanterre, EconomiX.
    14. J. Barthélemy & V. Bignon & B. Nguyen, 2018. "Monetary Policy and Collateral Constraints since the European Debt Crisis," Working papers 669, Banque de France.
    15. Corradin, Stefano & Heider, Florian & Hoerova, Marie, 2017. "On collateral: implications for financial stability and monetary policy," Working Paper Series 2107, European Central Bank.
    16. Jakob Korbinian Eberl, 2016. "The Collateral Framework of the Eurosystem and Its Fiscal Implications," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 69.
    17. Wahrenburg, Mark & Kaffenberger, Bijan, 2015. "Fragmentation in the european retail deposit market and implications for loan availability in european member states," SAFE White Paper Series 31, Leibniz Institute for Financial Research SAFE.
    18. Bignon, V. & Boissay, F. & Cahn, C. & Harpedanne De Belleville, L-M, 2016. "Les créances privées davantage éligibles au refinancement de l’Eurosystème Conséquences sur l’offre de crédit," Bulletin de la Banque de France, Banque de France, issue 206, pages 19-28.
    19. Bank for International Settlements, 2015. "Central bank operating frameworks and collateral markets," CGFS Papers, Bank for International Settlements, number 53, december.
    20. Jung-Hyun Ahn & Vincent Bignon & Régis Breton & Antoine Martin, 2016. "Liquidity, Collateral Quality, and Negative Interest Rate," Staff Reports 763, Federal Reserve Bank of New York.
    21. repec:ecb:ecbdps:20174 is not listed on IDEAS
    22. Sergio Gavilá & Alfredo Maldonado & Antonio Marcelo, 2020. "The Banco de España in-house credit assessment system," Revista de Estabilidad Financiera, Banco de España, issue Spring.

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    More about this item

    Keywords

    central bank collateral eligibility; credit claim; syndicated loan;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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