The European Central Bank has amended its monetary policy implementation guidelines to revise how the Eurosystem assesses collateral eligibility and risk. From Nov. 30, 2026, the framework will use the second-best external rating for private sector assets, apply an updated haircut schedule and align the treatment of financial subsidiaries of non-financial corporate groups with their parent companies. The second-best rating will determine eligibility and haircuts for assets including unsecured and covered bank bonds and debt issued by non-financial corporations and the non-euro area public sector. Euro area public sector assets will remain subject to the first-best rating. The revised haircut schedule refines the treatment of own-used or retained assets and accounts for amortization type when setting haircuts for individual credit claims. Qualifying financial subsidiaries will move to haircut category III, become eligible as credit claim debtors and be subject to the climate factor. Credit claims that rely on COVID-19-related public guarantees because they do not meet all general framework requirements will remain eligible only through the end of 2026.
Source: 2026-09-29European Central Bank
European Central Bank amends Eurosystem collateral rules to use second-best private asset ratings and revise haircuts
The European Central Bank has amended the Eurosystem collateral framework from Nov. 30, 2026, introducing second-best ratings for private sector assets and revising collateral haircuts. The changes also align qualifying financial subsidiaries with their non-financial corporate parents, while certain credit claims backed by COVID-19-related public guarantees will lose eligibility after 2026.