Following a review of the risk control measures in its collateral framework, the European Central Bank Wednesday unveiled a new range of premiums on the assets used as collateral to borrow cash from the bank.
The ECB said that the new schedule graduates the so-called "haircuts" according to differences in maturities, liquidity categories and the credit quality of the assets concerned.
"The new haircuts will not imply an undue decrease in the collateral available to counterparties," the central bank added.
The ECB said that the definition of liquidity categories for marketable assets and the application of additional valuation mark-downs for theoretically valued assets have also been fine-tuned.
The bank noted that the new haircut schedule will enter into force on January 1, 2011.
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