The Use of Credit Claims as Collateral for Eurosystem Credit Operations

Tamura, Kentaro; Tabakis, Evangelos

doi:10.2139/ssrn.2255360

Cited by 5 publications

(1 citation statement)

References 2 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In contrast, the U.S. Federal Reserve and the Bank of England accept credit claims for certain operations, such as discount windows facilities, but not for their main open market operations. See, for example, Tamura and Tabakis (2013) and Cheun, von Köppen-Mertes, and Weller (2009) for details.…”

mentioning

confidence: 99%

The Interest of Being Eligible

Mésonnier¹,

O'Donnell²,

Toutain³

2021

J of Money Credit Banking

View full text Add to dashboard Cite

Major central banks accept nonmarketable assets, such as pooled individual corporate loans, as collateral in their refinancing operations with banks. Such “eligible” loans to firms may provide a liquidity service to the banks which originate them. Banks may in turn pass on a part of this benefit to their borrowers in the form of a reduced interest rate: the eligibility discount. We exploit a surprise extension of the Eurosystem's set of eligible collateral to medium‐quality corporate loans, the Additional Credit Claims (ACC) program of February 2012, to assess the eligibility discount to corporate loans spreads in France. We find that becoming eligible to the Eurosystem's collateral framework translates into a relative reduction in rates by 8 bps for new loans issued to ACC‐eligible firms , controlling for loan‐, firm‐, and bank‐level characteristics. We find that this collateral channel of monetary policy is only active for the banks which have a lower opportunity cost in pledging credit claims and which are well‐capitalized.

show abstract

mentioning

confidence: 99%