Stricter requirements for banks: ECB cancels easing of loan collateral

The banks have to adjust to the stricter credit regulations of the European Central Bank (ECB).

As the central bank announced on Tuesday, the conditions from June 29, 2023 will be the same as before the Corona crisis.

The main issue here is the haircuts on the collateral that banks submit as collateral for central bank loans.

These are bonds in particular.

Markus Fruehauf

Editor in Business.

• Follow I follow

The ECB had already announced in March that it would gradually withdraw the relief for banks that had been introduced during the pandemic.

Now, among other things, the valuation discounts for collateral are to be increased again.

Then the banks get less credit for the securities submitted.

In the future, the ECB will allocate EU bonds to the highest level.

To date, bonds from individual states have been included in category 1 with the smallest discounts.

But with the many issues due to the pandemic programs, the ECB believes that the EU bonds have sufficient liquidity.

Greek government bonds can still be submitted despite low ratings.

Climate risks are initially left out.