Securities lending of holdings under the expanded asset purchase programme (APP)
Updated on 18 July 2016
Since 2 April 2015, securities purchased under the public sector purchase programme (PSPP) have been made available for securities lending in a decentralised manner by Eurosystem central banks.
In addition, several Eurosystem central banks make their holdings under the three covered bond purchase programmes (CBPP, CBPP2 and CBPP3) available for securities lending.
As of 18 July 2016, holdings under the corporate sector purchase programme (CSPP) have also been made available for securities lending by the purchasing national central banks (Nationale Bank van België/Banque nationale de Belgique, Deutsche Bundesbank, Banco de España, Banque de France, Banca d’Italia and Suomen Pankki).
Further details on the APP securities lending arrangements of the ECB and the Eurosystem national central banks can be found on their respective websites (see below).
General APP securities lending framework
The aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity. The Eurosystem is primarily targeting market participants with market-making obligations.
Eurosystem central banks use various lending channels, taking into account the diversity of the existing securities lending arrangements and market characteristics across jurisdictions.
These channels may include bilateral securities lending and lending relying on specialised securities lending agents or on the lending infrastructure of international central securities depositories (ICSDs). The Eurosystem endeavours to offer effective and accessible securities lending arrangements.
Eurosystem central banks also make their APP holdings available for so-called fails mitigation lending programmes of international or domestic central securities depositories, or ensure that comparable arrangements are in place in their jurisdiction.
Lending of APP securities holdings takes place on a cash neutral basis. This means that repo transactions against cash collateral are accompanied by a fully offsetting reverse repo transaction for the same value date, and typically with the same counterparty.
Operational and risk parameters
The individual Eurosystem central banks determine the securities lending modalities of their respective APP holdings, including collateral eligibility, pricing, haircut, term and counterparty eligibility, so as to achieve the objective of supporting market liquidity. This allows Eurosystem central banks to reflect domestic infrastructures and market practices.
Effectiveness of operations
The Eurosystem APP securities lending activities are monitored closely so as to ensure the ongoing effectiveness of the arrangements.
|European Central Bank||(EN)|
|Nationale Bank van België/Banque Nationale de Belgique||(EN)||(EN)|
|Deutsche Bundesbank||(EN)||(same link)|
|Central Bank of Ireland||(EN)|
|Bank of Greece||(EN), (EL)|
|Banco de España||(EN), (ES)||(same links)|
|Banque de France||(EN), (FR)||(EN)|
|Banca d'Italia||(EN), (IT)||(EN), (IT)|
|Central Bank of Cyprus||(EN), (EL)|
|Lietuvos bankas||(EN), (LT)|
|Central Bank of Malta||(EN)|
|De Nederlandsche Bank||(EN)|
|Oesterreichische Nationalbank||(EN), (DE)|
|Banco de Portugal||(EN), (PT)|
|Národná banka Slovenska||(EN)|
|Suomen Pankki||(EN)||(same link)|