ECB sets November start for revised collateral ratings and haircuts

The European Central Bank published amendments to its Eurosystem monetary-policy guidelines on 29 September, setting 30 November 2026 as the date when revised collateral ratings and valuation haircuts apply. The rules govern how assets pledged for central-bank credit operations are assessed, making the changes relevant to banks that use those assets to secure financing.

Which ratings change

Under the amended framework, the ECB will use the second-best rating from accepted external credit assessment institutions to decide whether private-sector assets qualify as collateral and what haircut applies. The ECB identifies unsecured bank bonds, covered bank bonds and assets issued by non-financial corporations among those affected. It says the change also covers accepted non-euro-area public-sector assets. Euro-area public-sector assets will continue to be assessed using the first-best rating.

The ECB first announced the ratings decision in February 2025. At the time, it said that when an asset has only one rating from an accepted agency, it would apply a one-notch downgrade to that rating for collateral assessment. It also said it retained discretion to depart from agency ratings when warranted under its monetary-policy framework. The September announcement puts an application date on the changes to the guidelines.

How the haircuts work

A valuation haircut reduces the amount at which an asset counts as collateral. In Italy, Banca d’Italia says banks seeking Eurosystem refinancing pledge eligible financial assets, including debt securities and bank loans. It applies a reduction to each pledged asset’s value based on its credit-quality class and liquidity risk, and checks daily that each bank’s collateral adequately covers its outstanding monetary-policy financing. Those checks show why the way an asset is rated and valued matters to a counterparty using it for central-bank funding.

In the earlier review, the ECB outlined changes to haircuts for marketable assets across categories I to V, reflecting updated risk estimates for different maturities and credit-quality steps. It also set out dedicated haircuts for retained asset-backed securities and a separate schedule for covered bonds used by their own issuers, replacing the existing add-on approach for those bonds. These distinctions matter because the revised schedule treats different forms of pledged assets according to their characteristics.

For individual credit claims, the review called for more detailed haircuts that take account of how a claim is repaid, its remaining maturity, its credit-quality step and its interest-rate type. The ECB said counterparties would need to specify the amortisation type of each claim they mobilise. Its September release again points to that added detail in the revised treatment of credit claims.

Timing and remaining questions

The ECB’s November 2025 review had said the revised haircut schedule would begin no earlier than November 2026, allowing time for technical implementation and for counterparties to prepare. The September 2026 release sets 30 November as the applicability date for the amended guidelines. It says the guidelines are available in English on the ECB website and will be published in all 24 official EU languages in the EU’s Official Journal.

The announcement establishes the new rules and their timing, but gives no bank-by-bank estimate of their effect on eligible collateral or funding capacity. It also does not say how counterparties will change the assets they pledge. The practical effects will depend on the assets and ratings involved; the ECB has not presented an aggregate impact figure in its announcement.