New policies for collateral mobilisation and settlement

13 April 2021

The ECB Governing Council has decided that, when the Eurosystem Collateral Management System (ECMS) is launched in November 2023, the national central banks (NCBs) in the euro area will take eligible marketable collateral from their monetary policy counterparties only via central securities depositories (CSDs) that are part of TARGET2-Securities (T2S). Furthermore, it has decided that with the launch of the ECMS the fees related to the mobilisation of marketable assets as collateral via the Correspondent Central Banking Model (CCBM) will be set at zero.

With the first policy, which is also referred to as the T2S settlement policy, Eurosystem monetary policy counterparties will be required to mobilise collateral for use in Eurosystem credit operations into accounts held by euro area NCBs in CSDs that participate in T2S. Counterparties will have the opportunity to benefit from the harmonised settlement procedures in T2S and its auto-collateralisation functionality and to optimise their securities and cash accounts management. Counterparties may continue maintaining their securities source accounts in any eligible CSD of their choice (whether or not that CSD is part of T2S).

The second policy, the abolition of CCBM fees, became possible thanks to the automation of related CCBM procedures that the ECMS will introduce.

The ECMS will be the new common system for managing assets used as collateral in Eurosystem credit operations. It will replace the existing 19 individual collateral management systems of the euro area NCBs. The ECMS is expected to foster harmonisation of collateral management practices and to contribute to financial integration in the EU.