Austrian Federal Economic Chamber, Division Bank and Insurance

1. Two other currencies, where the eligibility criteria are also very strict are the CZK and the RON, where the respective central banks allow also supranational debt instruments as collateral in addition to central government debt or debt issued by the central bank. However, both currencies are not classified as with „narrow central bank eligibility” by EBA and are thus not eligible for a waiver.
2. In our view, the inclusion of the eligibility of supranational debt by the Czech National Bank (CNB) and the Romanian National Bank (RNB) does not substantially change the original definition of „narrow central bank eligibility”, as the proportion of most banks’ Counter Balancing Capacity (CBC) that consists of supranational debt, will not be material.
3. In case of CZK and RON, supranational financial institutions do not issue a material volume of bonds, which can be included in banks’ CBC, therefore the inclusion or exclusion of supranational debt in the definition of „narrow central bank eligibility” for those 2 currencies does not really make a difference. For example, in the case of RON, there are only 3 eligible bonds issued by supranationals denominated in RON, 2 of them issued by the European Investment Bank (EIB) with a total volume of 450m RON (100m EUR) and 1 issued by European Bank for Reconstruction & Development (EBRD) with a notional of 15m RON (3.4m EUR). Those figures cannot really justify the decision, not to consider the RON as a currency for which a „narrow central bank eligibility” exists.
4. Therefore, our proposal is that the definition of „extremly narrow definition of central bank eligibility” shall be extended so as to include supranational debt, which would mean that the CZK and RON will also be classified as currencies and hence will be eligible for a waiver according to Art. 416 (3d).
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Dr. Franz Rudorfer
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