ECB to accept sustainability-linked bonds as collateral
Bonds with coupons linked to sustainability performance targets will be eligible as collateral for the Eurosystem’s credit operations and included in the European Central Bank’s asset purchase schemes.
As a first step towards making the European Central Bank (ECB) monetary policy greener, the ECB will start accepting bonds with coupon structures linked to certain sustainability performance targets, as collateral for Eurosystem credit operations. These bonds will also be eligible for Eurosystem outright purchases for monetary policy purposes.
The coupons must be linked to a performance target referring to the environmental objective(s) set out in the EU Taxonomy Regulation and/or to one or more of the United Nations Sustainable Development Goals relating to climate change or environmental degradation.
The ECB decision, applicable as of 1 January 2021, is a strong signal of the Eurosystem’s support for innovation in the area of sustainable finance.
For more information, please consult the following page on the ECB’s website.
Judith RaijmakersPartner Attorney at law
Judith Raijmakers, attorney at law, is a partner in our Zurich office. She focuses on banking and finance matters including secured lending, debt (re)structuring, debt issuances and financial regulatory work.T: +41 43 434 67 24 M: +41 79 870 91 03 E: email@example.com