In banking practice: recognized collateral for loans granted (an asset or third-party commitment that is accepted by the collateral taker to secure an obligation of the collateral provider vis-à-vis the collateral taker); in this sense, roughly speaking, the multiple form of collateral. – Assets that credit institutions deposit with the central bank as collateral for short-term liquidity loans and assets that the ECB purchases from credit institutions in the course of liquidity-providing repurchase agreements (assets which can be used as collateral in order to obtain credit from the ECB), also referred to as eligible collateral, eligible assets. – At the beginning of 2007, a single collateral register was introduced at the ECB, replacing the two categories previously consisting of tier one and tier two collateral. – As a rule, the ECB uses its own procedure, the Eurosystem credit assessment framework, to assess the credit quality of the collateral submitted to it. – At the beginning of 2013, the list of eligible collateral at the ECB comprised around 40,000 items. Given difficult-to-follow features, hardly anyone seems to keep track of exactly how safe these securities are in each case, and whether they are rated in a way that reflects their default risk. – See lendability, blank, covenant, covered bonds, financial collateral, general collateral repos, real estate collateral, IRB approach, Category 1 collateral, central bank eligibility, collateral, credit assessment framework, rating, repo market, Short-Term European Papers, collateral, marketable, collateral schedule, uniform, redistribution, central bank-influenced, sub-collateral. – Cf. Monthly Report of the Deutsche Bundesbank of April 2001, p. 22 (listing of collateral under Basel II), Monthly Report of the ECB of April 2001, p. 55 ff. (overview p. 60, presentation of policies also of other central banks p. 68 f.), Monthly Report of the ECB of May 2004, p. 81 f. (exclusion provision: p. 82), Monthly Report of the Deutsche Bundesbank of July 2004, p. 40 f. (EU Directive on Financial Collateral Arrangements), ECB Monthly Report of February 2006, p. 92 (use of sovereign debt instruments as collateral for ECB credit operations), Deutsche Bundesbank Monthly Report of April 2006, p. 31 ff. (creation of a single list of eligible collateral in the euro area), p. 36: Eligibility criteria (overview), p. 39: Credit quality categories (overview), and p. 81 ff, textbook presentation), BaFin’s Annual Report 2006, p. 39 (recent supervisory developments regarding insurance), ECB Monthly Report of October 2007, p. 93 ff. (comparison of collateral regimes at the ECB with U.S. and Japan; many overviews), ECB Annual Report 2008, pp. 117 f., pp. 121 ff. (expansion of the list of eligible collateral during the financial crisis; overviews), ECB Annual Report 2009, pp. 113 f. (purchase of covered bonds by the ECB), ECB Annual Report 2011, p. 92 (breakdown of collateral deposited at the ECB since 2006; expanded list of collateral), ECB Monthly Report of February 2012, pp. 33 f. (expansion of the list of eligible collateral pushed through the Governing Council).
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