On Wednesday 22 April, the European Central Bank adopted new temporary measures supplementing those already taken at the beginning of April with a view to easing its collateral requirements for banks refinancing with the institution (see EUROPE 12464/28).
This time, the aim is to reduce the impact of the possible rating downgrades resulting from the economic fallout from the COVID-19 pandemic on securities provided by the euro area banking sector as collateral. The aim is to ensure that banks have sufficient assets that they can mobilise as collateral with the Eurosystem to participate in the liquidity-providing operations and to continue providing funding to the euro area economy, the ECB said.
In particular, assets rated at least BBB- as at 7 April, if they undergo a subsequent downgrading of their financial rating, will continue to be eligible until September 2021. The same applies to issuers of securities rated BBB- at the time of the first measures.
More info at: https://bit.ly/2Vu8QKu (Original version in French by Mathieu Bion)