Opinion of the European Central Bank of 16 March 2016 on financial instruments eligible for monetary policy operations (CON/2016/12)
Date: 2016-03-16
Institutions: European Central Bank
Subjects: Romania, financial instrument, liquidity control, open market

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 16 March 2016 

on financial instruments eligible for monetary policy operations 

(CON/2016/12) 

Introduction and legal basis 

On  3  February  2016  the  European  Central  Bank  (ECB)  received  a  request  from  Banca  Naţională  a 

României (BNR) for an opinion on a draft regulation on assets eligible for open market operations of BNR 

and on standing facilities granted by BNR (hereinafter, the ‘draft regulation’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning  of  the  European  Union  and  Article 2(2)  of  Council  Decision  98/415/EC1,  as  the  draft 

regulation relates to instruments of monetary policy in a Member State whose currency is not the euro. In 

accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central 

Bank, the Governing Council has adopted this opinion. 

1.  

Purpose of the draft regulation 

1.1  The  draft  regulation  recasts  the  national  legal  framework  governing  assets  eligible  for  monetary 
policy  operations  conducted  by  BNR2.  Its  purpose  is  to  establish  transparent  criteria  for  the 

acceptance  of financial  instruments  as collateral  in  BNR’s  open  market  operations,  and  for  being 

granted standing facilities with BNR. 

1.2  The draft regulation sets out, in particular: 

(i)  

principles  to  be  followed  in  conducting  the  eligibility  assessment  and  the  valuation,  in 
applying risk control measures and in the management of financial instruments3;  

(ii)  

general  eligibility  criteria  for  the  acceptance  of  financial  instruments  for  trading  and  as 

collateral  in  BNR’s  open  market  operations,  and  for  being  granted  standing  facilities  with 

BNR, which take into account: (a) the type of issuer; (b) the type of asset; (c) the rating of an 

issuer  and/or  issue  of  financial  instruments;  and  (d)  the  registration  and  settlement 
procedure4; 

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2  

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4  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

See Chapter II of Regulation No 1/2000 of Banca Naţională a României of 30 March 2000 regarding open market 
operations  conducted  by  Banca  Naţională  a  României  and  standing  facilities  granted  by  it  to  eligible  participants 
(republished in Monitorul Oficial al României, Part I, No 84 of 1 February 2008), which will be repealed once the draft 
regulation enters into force. 
See Article 2 of the draft regulation. 

See Article 3 of the draft regulation. 

 
 
 
 
                                                 
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(iii)   general legal requirements for the eligibility of financial instruments5; 

(iv)   specific  eligibility  criteria  for  different  types  of  debt  instrument  such  as:  government  bonds, 

debt  certificates  issued  by  BNR,  bonds  issued  by  certain  international  financial  institutions, 
bonds issued by regional or local public authorities, and mortgage bonds6; 

(v)  

rules on the use and allocation of eligible assets in BNR’s operations7; 

(vi)  

risk-control measures to be applied by BNR in relation to eligible assets, including valuation 

haircuts,  variation  margins,  margin  calls,  and  setting  limits  on  the  volume  of  assets  with  a 
high liquidity risk8; and 

(vii)   a valuation methodology for financial instruments9. 

2. 

General observations 

2.1   The ECB has no comments on the draft regulation. 

2.2   As a Member State whose currency is not the euro Romania and, in turn, BNR retain their powers 
in the field of monetary policy according to national law10 until such time as the relevant derogation 

is lifted and Romania adopts the euro. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 16 March 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

5  
6  
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10  

See Article 12 of the draft regulation. 

See Articles 7 to 11 of the draft regulation. 
See Chapter IV of the draft regulation. 
See Article 17 of the draft regulation. 

See Chapter VI of the draft regulation. 
Article  282(4)  of  the  Treaty  and  Article  42.2  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 
European Central Bank. 

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