Central Banks Make PSPP Securities Available For Lending

Securities purchased under the public sector purchase programme (PSPP) have been made available for securities lending in a decentralised manner by a number of Eurosystem central banks from April 2.
By Janet Du Chenne(59204)
Securities purchased under the public sector purchase programme (PSPP) have been made available for securities lending in a decentralised manner by a number of Eurosystem central banks from April 2.

In addition to the European Central Bank, The central banks of Belgium, Germany, Estonia, Belgium, Finland, Spain, the Netherlands, France and Lithuania are participating in the initiative. Further national central banks will follow soon. The aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity.

The Eurosystem central banks will use various channels taking into account not only the diversity of the existing securities lending arrangements and market characteristics across jurisdictions, but also the goal of starting securities lending without undue delay. The Eurosystem will endeavour to attain a further convergence of lending arrangements over time.

Eurosystem central banks will make their PSPP holdings available via effective lending channels, depending on their current practices. These channels may include bilateral securities lending and lending relying on specialised securities lending agents or on the lending infrastructure of international central securities depositories (ICSDs).

Furthermore, Eurosystem central banks will, in principle, also make their PSPP holdings available for so-called fails mitigation lending programmes of international or domestic central securities depositories or ensure that comparable arrangements are in place in their jurisdiction.

Securities issued by supranational institutions and purchased under the PSPP by Eurosystem central banks will be made available for securities lending under the coordination of Banque de France and Banco de España.

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