Collateral Management

We provide monetary credit and intraday credit and a range of services related to payments and/or post-trade infrastructure. We also manage the collateral mobilised by counterparties for this purpose

Monetary and intraday credit

We provide monetary and intraday credit. Credit must always be covered by sufficient and adequate collateral in accordance with Eurosystem regulations. We manage the collateral mobilised by counterparties in our monetary collateral pool, and are responsible for transaction processing and corporate actions. Examples of these actions include collecting interest payments and transferring the proceeds to the counterparty's TARGET2 current account. We charge a custody fee and transaction costs for these services.

Read more on the terms and conditions for monetary policy transactions. 

DNB-specific services

We manage the collateral for DNB-specific services and purposes, e.g. 

  • collateral management for margin and clearing funds of central counterparties (CCPs). We block part of the collateral pledged by these parties to serve as a buffer in the event of losses in security and options deals settlement.
  • banknote consignment
  • retail payments clearance (through EBA STEP2)

Counterparties wishing to use these services must provide collateral in the Second Collateral Pool. We have set up our own collateral framework and additional eligibility criteria for this purpose

Eligible assets for the Monetary Pool

Counterparties must provide assets that comply with the Eurosystem's eligibility criteria. These criteria

  • protect against potential defaults
  • ensure equal treatment of all counterparties in the euro area
  • promote operational efficiency 

The Eurosystem has a single list of collateral including all eligible marketable and non-marketable assets. See theList of eligible marketable assets  on the ECB website.Specific non-marketable assets, such as credit claims, are eligible throughout the Eurosystem. Read more.  

Monetary Pool credit facility

The credit amount we provide to a counterparty will depend on the value of the assets it has mobilised as collateral. We take various risk management measures to protect ourselves against the risk of default. We apply a valuation haircut, for example. The remaining amount after application of the haircut is the credit facility: the maximum credit available to a counterparty to cover monetary policy transactions and payments in TARGET2.

Mobilising collateral to the Monetary Pool

Counterparties can mobilise securities as collateral in the following four ways:

Standard transfers through a CSD or ICSD
Counterparties holding a custody account at a CSD, an ICSD, Euroclear Nederland or Euroclear Bank can mobilise securities to DNB by transferring them to DNB's custody account at Euroclear Nederland or Euroclear Bank.

Direct links
Counterparties can also use approved direct links, which are automated links between CSDs approved by the Eurosystem. They enable foreign CSDs to maintain securities in DNB's custody account at Euroclear Nederland. The ECB website lists all approved direct links.

The Correspondent Central Banking Model (CCBM) offers counterparties a range of options for the transfer and custody of securities. This allows counterparties to mobilise non-domestic securities with DNB, using the CSD account of the relevant national central bank. This model's unique feature is that securities can be mobilised from any CSD to any national central bank throughout the EU.

Domestic or cross-border triparty services 
Counterparties may choose to fully or partly outsource their collateral management to a CSD or an ICSD (the triparty agent). The triparty agent provides its collateral management services based on the principle that eligible assets of the counterparty (the collateral giver) are used as collateral for monetary credit operations or the provision of intraday credit in the form of a global amount, as instructed by the counterparty. The triparty agent ensures that the eligible assets are transferred to a dedicated account with the central bank (the collateral taker). The counterparty can make adjustments to the global amount, and/or change the underlying collateral.