ECB Publishes Amended Eurosystem Collateral Rules in Regular Review

The European Central Bank published amendments to its guidelines on the implementation of monetary policy in the Eurosystem on 29 September 2026, setting out changes to the Eurosystem collateral framework that will apply as of 30 November 2026 as part of a regular review. The amended guidelines introduce a second-best external rating rule for private sector assets, an updated haircut schedule, an end-2026 eligibility limit for credit claims backed by COVID-19-related public sector guarantees, and a new haircut classification for financial subsidiaries of non-financial corporate groups.

The changes are set out in Guidelines ECB/2026/26 and ECB/2026/27. The acts amend Guideline (EU) 2015/510 of 19 December 2014 on the implementation of the Eurosystem monetary policy framework, the General Documentation Guideline, and Guideline (EU) 2016/65 of 18 November 2015 on the valuation haircuts applied in the implementation of the framework. The guidelines are available in English on the ECB’s website and will be published in all 24 official EU languages in the Official Journal of the European Union.

Second-Best Ratings for Private Sector Assets

Under the amended framework, the second-best rating issued by external credit assessment institutions will be used to assess the eligibility of private sector assets as collateral under the Eurosystem collateral framework and to determine the haircuts applied to those assets. The rule covers private sector assets such as unsecured bank bonds, covered bank bonds and assets issued by non-financial corporations, and it also applies to the accepted non-euro area public sector. For euro area public sector assets, the first-best rating will continue to apply.

The Governing Council decided the change on 19 February 2025, and the ECB announced it on 21 February 2025. According to that announcement, the decision followed a review of the rating aggregation rules in the Eurosystem Credit Assessment Framework that was aimed at making better use of all available credit rating information and took account of the increased number of accepted external credit assessment institutions, with the Eurosystem open to accepting additional rating agencies once they comply with the framework’s acceptance criteria. Under the rules in force until now, where multiple ratings exist the Eurosystem selects the first-best rating when it determines the eligibility of private and public sector assets and assigns haircuts; asset-backed securities are already subject to a second-best rule. Under the new rules, private sector assets will be assessed on the second-best rating among accepted ratings, and assets with only one rating from an accepted institution will receive a one-notch downgrade to determine the rating relevant for collateral purposes.

The first-best rule is retained for assets issued or guaranteed by euro area central, regional and local governments, international and supranational issuers located in the euro area whose shareholders are located in the European Union, and agencies recognised by the ECB, assets for which the Eurosystem makes regular use of all available credit quality information and applies enhanced due diligence procedures. The Governing Council also reserved the right to deviate from credit rating agencies’ ratings if warranted, in line with its discretion under the monetary policy framework, avoiding mechanistic reliance on those ratings. When the change was first announced, the ECB said it would enter into force no earlier than 18 months later to allow implementation in the Eurosystem’s IT infrastructure.

Haircut Schedule, COVID Guarantees and Corporate Subsidiaries

The updated haircut schedule implements the review of the risk control framework for monetary policy credit operations that the ECB announced on 17 November 2025. According to that announcement, the update aims to maintain an adequate level of risk protection, improve consistency and enhance the risk equivalence of assets, while ensuring collateral availability. The previous review of the framework took place in 2022, with implementation in June 2023.

The November 2025 announcement set out four measures now reflected in the amended guidelines. Haircuts for non-own-used marketable assets in haircut categories I to V are being updated to align them more closely with updated risk estimates across maturities and credit quality steps. Retained asset-backed securities in category V receive dedicated haircuts under an improved definition that classifies an asset-backed security as retained if the mobilising counterparty and the originator are the same or closely linked. Haircuts for own-used covered bonds are refined, with the current add-on approach replaced by a separate haircut schedule. Haircuts applied to individual credit claims gain granularity by taking into account the type of amortisation, residual maturity, credit quality step and interest-rate type, and counterparties will need to specify the type of amortisation for each credit claim mobilised, in addition to the information currently provided. When the review was announced, entry into force was planned for November 2026 at the earliest, allowing technical implementation by the Eurosystem and preparations by counterparties.

The amended guidelines also give effect to two changes announced in 2026. Credit claims that do not comply with all requirements of the general collateral framework but that benefit from a COVID-19-related public sector guarantee under the temporary framework will remain eligible only until the end of 2026, a step the ECB said was announced on 25 June 2026.

Financial subsidiaries of non-financial corporate issuer groups are allocated, subject to certain conditions, to the same haircut category as non-financial corporations. The entities will be assigned to haircut category III, become eligible as credit claim debtors and become subject to the climate factor under the Eurosystem collateral framework. The Governing Council took the decision on 9 July 2026 through the creation of a dedicated issuer group category, and the ECB said the changes ensure that financial subsidiaries belonging to a non-financial corporate issuer group are subject to the same haircut treatment as their parent undertaking. The measure was set out in the decisions the Governing Council published on 24 July 2026.

The same decision record shows a related step. On 24 June 2026 the Governing Council decided on the eligibility criteria and risk control framework to permanently integrate portfolios of non-financial corporate credit claims into the general collateral framework. The ECB described the decision as the final step in phasing out the temporary additional credit claim framework, following an initial announcement in November 2024, and as marking the return to a single list of eligible collateral applied across the whole euro area, with technical implementation planned for November 2027 at the earliest. On 22 July 2026 the Governing Council also decided to extend the use of climate factors in the collateral framework to non-financial corporate credit claims, building on a climate factor for marketable assets issued by non-financial corporations and their affiliated entities that became effective on 15 June 2026.