Could European Union Allowances (EUA) received by a credit institution as collateral be considered as eligible one from prudential point of view ?
If yes, how EUA should be considered ? As financial collateral or as other physical collateral ?
EU Allowances (EUA) are climate credits (or carbon credits) used in the European Union Emissions Trading Scheme (EU ETS). EU Allowances are issued by the EU Member States into Member State Registry accounts. EU Allowances are issued by the EU Member States into Member State Registry accounts.
Such EUA are received by Europen Credit Institution in collateral of financing transaction (such reverse repos for example).
The regulation 575/2013 is not clear regarding the prudential treatment of such collateral.
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