Einde inhoudsopgave
State aid to banks (IVOR nr. 109) 2018/3.3.2
3.3.2 Bond loan scheme
mr. drs. R.E. van Lambalgen, datum 01-12-2017
- Datum
01-12-2017
- Auteur
mr. drs. R.E. van Lambalgen
- JCDI
JCDI:ADS592939:1
- Vakgebied(en)
Financieel recht / Europees financieel recht
Mededingingsrecht / EU-mededingingsrecht
Voetnoten
Voetnoten
Greece introduced a ‘Bond Loan Scheme’ and Cyprus introduced a ‘Special government bonds scheme’. The Polish scheme comprised State Treasury bonds related support measures.
The ECB monetary policy operations can be divided into open market operations and standing facilities. Open market operations can be divided into i) main refinancing operations (MRO), ii) longer-term refinancing operations (LTRO), iii) fine-tuning operations (FTO), and iv) structural operations. Standing facilities can be divided into the marginal lending facility and the deposit facility. Either the ECB conducts a repurchase agreement or it grants a loan against assets pledged as collateral.
As a general rule, unsecured lending will be more expensive than secured lending.
ECB, The monetary policy of the ECB, Frankfurt am Main 2011, p. 42.
Other forms of secured lending are Covered Bonds and Asset Backed Securities (ABS). See: Alink & Aarts 2013.
In exchange for the temporary acquisition of the bonds, the beneficiary banks have to pay a fee to the government. In addition, they have to provide collateral. The assets that are provided as collateral will probably be of such a quality that they will not be accepted by other banks (or other money market participants) as collateral.
Greece – N560/2008, para. 81. The fee is therefore calculated in the same way as the guarantee fee.
Another liquidity enhancing measure is a bond loan scheme.1 Such a scheme ensures that banks have sufficient access to liquidity. The functioning of this scheme can be explained as follows. Banks obtain funds on the money market. Important participants on the money market are other banks and the ECB.2 A distinction can be made between uncollateralised/unsecured lending and collateralised/secured lending.3 Collateralised lending often takes the form of a repurchase agreement.4 Collateralised lending can also take the form of a loan that is granted against assets that are pledged as collateral.5 Not all assets can be used as collateral. The ECB has certain eligibility criteria with respect to the collateral. Banks not having assets that can be used as collateral may have problems of obtaining funds on the money market. This may create liquidity problems for those banks. These liquidity problems are solved by the bond loan scheme, in which the State lends government bonds to the beneficiary banks.6 These government bonds can be used as collateral in interbank transactions and as collateral in refinancing transactions or marginal lending facilities of the ECB. The temporary acquisition of the bonds allow the beneficiary banks to obtain liquidity from the money market. As the Commission explained in its decisions on these bond loan schemes, the economic effect of a bond loan scheme is similar to that of a guarantee.7