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Amendments to Annex I (General Documentation) and Annex II (Additional Minimum Common Features) to Guideline ECB/2000/7 on monetary policy instruments and procedures

30 October 2007

The Governing Council of the European Central Bank (ECB) has adopted Guideline ECB/2007/10, amending Guideline ECB/2000/7 on monetary policy instruments and procedures of the Eurosystem. The amendments pertain to:

  • the document entitled “The implementation of monetary policy in the euro area: General documentation on Eurosystem monetary policy instruments and procedures” (referred to as the “General Documentation”), which is Annex I to the Guideline, and
  • Annex II to the Guideline, setting out the “Additional Minimum Common Features”.

The amendments mainly take account of recent decisions by the Governing Council and relate, in particular, to the following four topics:

  1. Monetary policy instruments: After reviewing the monetary policy instruments, the Governing Council has decided to remove the option of employing outright transactions for fine-tuning operations. This instrument has never been used in the past. At the same time, the Governing Council has retained the option of using outright transactions for structural operations.
  2. Eligible assets: The changes relating to assets eligible for Eurosystem credit operations primarily reflect decisions previously taken by the Governing Council:- The Governing Council decided on 25 May 2007 an amendment to the calendar for phasing out marketable tier two assets. Marketable assets, which have been issued prior to 31 May 2007 and are traded on non-regulated markets that currently fulfil the Eurosystem’s requirements for safety and accessibility, but not for transparency, will remain eligible until 31 December 2009 and will become ineligible thereafter.- The Governing Council specified on 25 May 2007 that, with the exception of international or supranational institutions, issuers of marketable assets eligible for Eurosystem credit operations must be established either in the European Economic Area (EEA) or in one of the four non-EEA G10 countries. Thus, assets issued by entities domiciled outside the EEA or the non-EEA G10 countries are not eligible, irrespective of whether a guarantee by an entity established in the EEA is available. Marketable assets issued before 1 January 2007 that were issued by an entity not established in the EEA or in one of the non-EEA-G10 countries but guaranteed by an entity established in the EEA remain eligible until 31 December 2011 and will become ineligible after that date.- The Governing Council decided on 22 February 2007 to amend the credit assessment for covered bank bonds. Covered bank bonds issued from 1 January 2008 are treated in the same way as all other marketable assets by subjecting them to the same rating requirements. For covered bank bonds that are issued before 1 January 2008, the old credit assessment will apply until their maturity. Accordingly, these covered bank bonds are deemed to fulfil the Eurosystem credit standards if they comply strictly with the criteria set out in Article 22(4) of the UCITS Directive. The change aims at streamlining and simplifying the collateral framework and does not impact the eligibility of the covered bank bonds as these generally fulfil the rating requirements of the Eurosystem.- The Governing Council clarified its decision of 13 January 2006, specifying that units of French fonds communs de créance (FCCs) issued prior to 1 May 2006 will remain eligible for a transitional period until 31 December 2008 but that FCCs issued on or after 1 May 2006 will not be eligible.
  3. Target2: On 26 April 2007 the Governing Council adopted Guideline ECB/2007/2 on a Trans-European Automated Real-time Gross settlement Express Transfer system (TARGET2), establishing the TARGET2 system, which replaces the current TARGET system as laid down in Article 14.2 of Guideline ECB/2007/2. National central banks will migrate to TARGET2 in accordance with the schedule specified in Article 13 of Guideline ECB/2007/2. To reflect the new system, amendments have been introduced to Annexes I and II to Guideline ECB/2000/7.
  4. Euro area enlargement: In its decision of 10 July 2007, the Governing Council concluded that Cyprus and Malta have fulfilled the conditions necessary to adopt the euro on 1 January 2008. To reflect the enlargement of euro area, some smaller amendments became necessary to the General Documentation.

Amendments to Annexes I and II to Guideline ECB/2000/7 relating to aspects 1) to 3) listed above will apply from 19 November 2007. Amendments relating to the euro area enlargement listed under point 4) above will apply from 1 January 2008.

Guideline ECB/2007/10 can be downloaded from the ECB’s website at


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