Collateral account

Logo Collateral Management

The Deutsche Bundesbank maintains the collateral accounts required for posting monetary policy collateral for its monetary policy counterparties. It is therefore involved in the implementation of the Eurosystem’s operational monetary policy at a central point. Operational monetary policy includes, amongst other things, open market transactions to absorb and supply liquidity, which the Deutsche Bundesbank carries out within the scope of its responsibility for its counterparties established or resident in Germany.

Customer information

As part of its collateral management, the Deutsche Bundesbank provides its monetary policy counterparties with the (collateral) accounts and (operational) safe custody accounts required for posting monetary policy collateral (marketable and non-marketable assets). In a collateral account, valued collateral stocks are compared against total utilisation. Free collateral value may be transmitted to a TARGET2 PM account as a variable or, if desired, fixed credit line.

The Deutsche Bundesbank uses a pooling system to collateralise Eurosystem credit operations. The advantage of this system is that the collateral values of all submitted collateral are combined in a single collateral account rather than individual eligible assets being allocated to specific monetary policy operations. Credit utilisation must be adequately covered by eligible collateral at all times.

Collateral account
The diagram illustrates the structure of a monetary policy collateral account.