From September counterparty data specialist Avox began offering monitoring services for collateral used in open market operations in the Eurosystem. Assets eligible as collateral for Eurosystem monetary policy operations must fulfill certain criteria. A bank must avoid so called “close links”, meaning it must not submit as collateral any asset issued or guaranteed by itself or by any other entity with which it has close links by owning 20 percent or more of the capital. Without hierarchies and mapped assets, banks today usually do not apply uncovered bonds as collateral to avoid the close link risk. Avox’s Collateral Monitoring Services allow banks to monitor potential close links and therefore make more assets available as collateral.
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