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European Central Bank tightens collateral rules for tapping its cash

The Eurosystem is excluding investment funds as eligible issuers and guarantors for the collateralisation of Eurosystem credit operations, ECB said

Reuters  |  Frankruft 

The headquarters of the European Central Bank (ECB) are pictured in Frankfurt
The headquarters of the European Central Bank (ECB) are pictured in Frankfurt

The is tightening regulations to prevent banks from pledging some riskier forms of collateral when they borrow from euro zone central banks, it said on Thursday.

"The is excluding investment funds as eligible issuers and guarantors for the collateralisation of credit operations, taking into account their specific risks related to potential asset portfolio changes," the said.

"The is excluding commercial mortgage-backed securities (CMBSs) from collateral eligibility, owing to their relatively complex nature," it added.

First Published: Thu, February 08 2018. 19:02 IST
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