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De Nederlandsche Bank (DNB) provides monetary and intraday credit and offers specific services based on appropriate collateral. We also manage the collateral pledged to us by counterparties for this purpose. We call this collateral management.

Monetary and intraday credit

We provide monetary and intraday credit. Credit must always be covered by sufficient and appropriate collateral in accordance with Eurosystem regulations. We manage the collateral pledged by counterparties in our monetary collateral pool and are responsible for transaction processing and corporate actions. This may include collecting dividends and transferring the proceeds to the counterparty’s TARGET2 payment account. We charge a custody fee and transaction costs for these services.

DNB-specific services

We also manage the collateral for DNB-specific services and purposes, such as:

  • 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 securities and options deals settlement.
  • banknote consignment
  • retail payments clearance (through EBA STEP2)

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

Monetary Policy Transactions Conditions - Edition January 2021

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Eligible assets for the Monetary Pool

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

  • 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 the list of eligible marketable assets. Specific non-marketable assets, such as credit claims, are eligible throughout the Eurosystem.

Read more about eligible assets

Monetary Pool credit facility

The credit amount we provide to a counterparty will depend on the value of the assets it has pledged to us as collateral. The Eurosystem takes various risk management measures to protect itself against the risk of default, for instance, by applying a valuation haircut. 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 at any given time.

Pledging collateral to the Monetary Pool

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

Standard transfers through a CSD or ICSD

Counterparties holding a custody account at a central securities depository (CSD), an international CSD (ICSD), Euroclear Nederland or Euroclear Bank can pledge 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. See the lists of all approved direct links.

CCBM

The Correspondent Central Banking Model (CCBM) offers counterparties a range of options for the transfer and custody of securities. This allows counterparties to deposit securities for DNB with the custody account of the national central bank or that of the latter's CSD. 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 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 (collateral giver) are used as collateral for monetary credit operations or the provision of intraday credit. The eligible assets are transferred to the central bank (collateral taker). The triparty agent ensures that the underlying assets are transferred from the collateral giver's account to that of the collateral taker. The counterparty can make adjustments to the collateral by changing its global amount.

ECMS SWIFT templates

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