ECB will judge private collateral on its second-best rating from 30 November

Serguey Asael Shinder29 September 2026, 15:432 min read

The European Central Bank published amendments to its monetary policy implementation guidelines on 29 September, applying from 30 November 2026 as part of a regular review. The changes put into legal text decisions the Governing Council had announced over the previous 19 months.

The most consequential is the rating rule. From 30 November, the Eurosystem will use the second-best rating from the accepted external credit assessment institutions to decide whether private sector assets are eligible as collateral and which haircut applies. That covers unsecured and covered bank bonds, bonds of non-financial corporations and debt of public sectors outside the euro area. Euro area public sector assets stay on the first-best rating. The decision was announced in February 2025.

The haircut schedule itself is updated after the review of the risk control framework announced in November 2025. According to the ECB, the aim is adequate risk protection and consistency while keeping enough collateral available; the changes include refined haircuts for assets banks use as collateral for their own obligations, and more granular haircuts for individual credit claims that take account of how each loan amortises.

Two transitional items are closed. Credit claims that do not meet all general requirements but carry a COVID-19 public guarantee under the temporary framework remain eligible only until the end of 2026, as announced in June. And, as decided in July, financial subsidiaries of non-financial corporate groups move to haircut category III, the same as their parents, and become subject to the climate factor.

Why it matters

Moving from the first-best to the second-best rating is a tightening at the margin: an asset with one strong and one weaker rating is judged on the weaker one, which can change its haircut or its eligibility. Banks that rely on corporate and bank bonds for Eurosystem funding have two months to check where their pools land.