Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

255. To ask the Minister for Finance to set out categories of eligible collateral accepted by the Central Bank of Ireland for commercial banks seeking access to the lending facilities; to clarify if mortgages can be used as collateral by banks seeking to access Central Bank borrowing facilities; and if he will make a statement on the matter. [13172/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am informed by the Central Bank of Ireland that the main categories of marketable assets accepted under the Eurosystem's general (permanent) collateral framework are central government securities, corporate bonds, covered bonds, unsecured bank bonds, regional government securities, and asset-backed securities.

For non-marketable assets, the Eurosystem accepts certain types of credit claims (i.e. bank loans) to non-financial corporates, public sector entities (excluding public financial corporations), multilateral development banks and international organisations.

In the case of residential mortgages, the Eurosystem accepts two types of marketable assets under the general (permanent) collateral framework which are backed by pools of residential mortgages. Covered bonds are dual recourse assets issued by credit institutions which are generally secured by a pool of residential mortgages.

Residential mortgage backed securities (RMBS), a specific class of asset-backed securities, are another type of marketable asset accepted by the Eurosystem whereby the notes are backed by pools of residential mortgages. In addition, one non-marketable asset, retail mortgage-backed debt instruments (RMBDs), are also accepted under the general framework but this will be phased out as part of a wider simplification of the Eurosystem's collateral framework.

Aside from the general collateral framework, the Eurosystem has also operated a temporary collateral framework since the global financial crisis, which comprises crisis-related collateral easing measures. The temporary framework consists of assets (e.g. additional credit claims (ACCs)) that do not satisfy all the eligibility criteria of the general framework and were introduced to address the increased collateral needs of counterparties at times of heightened financial stress. ACCs can include pools of mortgages. However, these will be phased out in the coming year.