Securities Lending

The securities purchased under the PSPP are available for securities lending. The aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity.  The Central Bank of Ireland lends securities via two channels:

A list of the bonds available for securities lending can be found here.  The Central Bank's CBPP3 holdings are also available for securities lending via Euroclear.  Information on the availability of CBPP3 holdings can be obtained directly from Euroclear.

Bilateral Securities Lending

In line with the Governing Council decision of 8 December 2016, the Central Bank will accept cash as collateral in the PSPP securities lending facilities from 15 December 2016.

   
 Type of operations

 i) Cash neutral - 'Repo/Reverse Repo' transactions on a bilateral basis with matched cash settlements;

ii) Cash collateral - Repo transactions on a bilateral basis, where the offsetting reverse repo is not applicable

Eligible collateral for 'Repo/Reverse Repo' transactions

Eligible euro-denominated securities with a maturity of up to 10 years within Central Bank's credit limit framework

Eligible counterparties

Counterparties that are eligible to trade with the Central Bank as per the credit limit framework and have signed relevant legal agreements

Tenor

1 week

Maximum amount

Limits are based on the Central Bank of Ireland’s credit limit framework for both 'Repo/Reverse Repo' and Repo transactions

Pricing

i) For cash neutral - 'Repo/Reverse Repo' transactions, market based pricing subject to a minimum fee of at most 10 basis points is applied.

ii) For cash collateral - Repo transactions, a rate equal to the lower of the deposit facility rate minus 30 basis points (i.e. currently minus 70 basis points) and the prevailing market repo rate is applied.

Haircuts

Haircuts as per the Central Bank's credit limit framework

 

Eligible counterparties who have a Global Master Repurchase Agreement (GMRA) in place, or who wish to put one in place, can contact the PSPP team at pspp@centralbank.ie.

More information on the General APP securities lending framework can be found on the ECB’s website, including aggregated data on the securities lending activity of the Eurosystem.

Fails Prevention Programme

The Central Bank has made the securities it purchases under the PSPP available for fails prevention lending through its bond custodian, Euroclear Bank S.A./N.V.