ECB updates monetary policy collateral rules for Eurosystem operations

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ECB updates collateral rules

Highlights

From November 2026, the ECB will use the second-best external credit rating for determining collateral eligibility and haircuts on most private sector assets.
The ECB revised its risk control framework, introducing a more granular haircut schedule for own-used assets and individual credit claims to enhance risk protection and ensure asset equivalence.
Credit claims benefiting from COVID-19 public sector guarantees remain eligible collateral only until end-2026, ending pandemic-era accommodations in the collateral system.

Collateral framework changes from November 2026

As reported by the European Central Bank, the amended guidelines form part of a regular review of monetary policy implementation in the Eurosystem and introduce several adjustments to risk controls and asset treatment.

Under the changes, the second-best rating from external credit assessment institutions will be used to determine the eligibility of private sector assets as collateral and the haircuts applied to them. The rule covers assets such as unsecured bank bonds, covered bank bonds and securities issued by non-financial corporations and the non-euro area public sector, while euro area public sector assets continue to be assessed using the first-best rating.

The ECB also updates its risk control framework for monetary policy credit operations to preserve adequate risk protection, improve consistency and strengthen the risk equivalence of assets, while maintaining collateral availability. That includes a revised haircut schedule, with more refined haircuts for own-used or retained assets and more granular treatment of individual credit claims.

Operational impact on banks and corporate issuers

Credit claims that do not meet all requirements of the general collateral framework but benefit from a COVID-19-related public sector guarantee under the temporary framework remain eligible only until the end of 2026. That sets a defined end point for a pandemic-era accommodation within the collateral system.

The guidelines also reclassify, subject to certain conditions, financial subsidiaries of non-financial corporate issuer groups into the same haircut category as non-financial corporations. These entities are assigned to haircut category III, become eligible as credit claim debtors and are subject to the climate factor under the Eurosystem collateral framework, aligning their treatment with that of their parent NFCs.

Guidelines ECB/2026/26 and ECB/2026/27 are available in English on the ECB's website and are due to be published in all 24 official EU languages in the Official Journal of the European Union.

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