Correspondent central banking model
As correspondent central banking model (correspondent central banking model, CCBM) referred to one of the European Central Bank applied (ECB) method to ensure that eligible collateral, which in monetary policy operations or to obtain liquidity in TARGET2 are used system, the are available to the respective business partners regardless of their national affiliation and the safekeeping location of the collateral.
Purpose and functionality
The European System of Central Banks (ESCB) is decentralized in the sense that the ECB's business partners in monetary policy (credit) transactions do not settle their transactions directly with the ECB, but with the relevant national central bank (NCB). The problem here is that the collateral that the business partner (mostly a commercial bank) has to provide for the lending business will usually also include paper that was issued or held abroad. In practice, this would lead to difficulties due to the different regulatory framework conditions.
The correspondent central banking model is one way of solving this problem. It provides that in order to carry out a lending transaction for which the counterparty wishes to provide "cross-border" collateral, these collateral is collected and managed by the NCBs in whose country the collateral is located issued or held (if the collateral is marketable). This NCB serves to a certain extent as a representative (correspondent central bank, CCB) for the actual NCB (home central bank, HCB), with which the credit business itself is processed. There are more complex jurisdiction rules for non-marketable collateral.
In addition to the NCBs of the euro zone, the Danish, Swedish and British national banks are also connected to the CCBM. By far not all credit transactions with foreign collateral are processed through the CCBM; In addition to this, there are settlement systems that are used by the NCBs on their own terms and accepted by the ECB, and through which settlement is also possible.
Web links
- European Central Bank: Correspondent Central Banking Model (CCBM). Procedures for Eurosystem Counterparties (PDF file). Status: January 1, 2015, accessed on January 28, 2015. [Earlier version also in German: Dies .: Das Korrespondenzzentralbank-Modell (CCBM). Procedure for Eurosystem counterparties (PDF file). January 2011, accessed January 28, 2015.]
Remarks
- ^ European Central Bank: The Correspondent Central Banking Model (CCBM). Retrieved January 30, 2015.
- ↑ For a list of such systems cf. European Central Bank: Links between SSSs. Eligible links (direct and relayed). Retrieved January 30, 2015.