For all these reasons , it is important that a central bank monitors monetary and credit developments closely .

The asset must be deemed of high credit quality by the national central bank which has included it in its tier two list ( which could include a guarantee of a euro area guarantor which is deemed financially sound by the national central bank which has included the asset in its tier two list ) .

Credit standards

The creditworthiness is assessed using ECAF rules for credit claims

The asset must meet high credit standards .

Poor s recently to downgrade its credit rating.

11 They must meet high credit standards .

The credit ratings agency Standard amp

When the collateral considered is default risk free ( e.g. government bonds ) , collateralisation is a way to transform credit risk into market risk ( managed with risk controls as described above ) as the defaultrisky counterparty provides a default risk free asset to guarantee its position . Even when the collateral itself can be defaultable ( as with corporate bonds ) , the credit risk is strongly mitigated if the credit quality of the bonds is sufficiently high .

Poor s to strip France of its AAA credit rating.

Equity market the market in which equities are issued and traded . Equities are claims to a share in the ownership of a business .

In this context , monetary and credit developments , and their determinants , play a distinct role , given that monetary growth and inflation are closely related over the longer term ( see Chart 1 ) .

Establishment of high credit standards for marketable assets

Only high credit quality assets are accepted as collateral .

( 37 ) ECAIs are commonly referred to as rating agencies in financial markets .

First , each issue needs to be awarded a rating ( by a rating agency ) which indicates , in the view of the Eurosystem , that the debt instrument meets high credit standards .

Credit standards The debt instrument must meet the high credit standards specified in the ECAF rules for marketable assets , as set out in Section 6.3.2 .

Credit standards The RMBD must meet high credit standards , which are assessed through the part of the ECAF that addresses RMBDs , as set out in Section 6.3.3 .

CREDIT STANDARDS The debt instrument must meet the high credit standards specified in the ECAF rules for marketable assets , as set out in Section 6.3.2 .

A credit assessment from the system or source selected by the counterparty exists and is used to establish whether the public sector debtor or guarantor meets the credit quality threshold . ( ii ) In the absence of a credit assessment under ( i ) , an ECAI credit assessment of the debtor or guarantor is used ( 32 ) .

When the credit bubble collapsed in 2008, China's export markets suffered.

This implicit credit assessment has to meet the Eurosystem credit quality threshold .

This implicit assessment has to meet the Eurosystem credit quality threshold .

The framework also places strong emphasis on the credit quality assessment of the collateral eligible for policy operations , as this is essential to mitigate credit risk .

If a credit assessment from the system or source selected by the counterparty exists but is below the credit quality threshold , the debtor or guarantor is ineligible .

Credit standards The RMBD must meet high credit standards , which are assessed through the part of the ECAF that addresses RMBDs , as set out in Section 6.3.3 .

( ii ) In the absence of a credit assessment under ( i ) , an ECAI credit assessment of the debtor or guarantor is used .

35 See footnote 28 in this chapter .

quantitative monetary easing in March 2001 aimed at providing ample liquidity and keeping short term interest rates close to zero percent .

Specifically , it may be easier for non appointed CRAs to issue unsolicited credit ratings , since they will be given access to information provided by the issuer to the appointed CRA .

That's important and it's an important shift.

That's important. Why is it important?

Important

Such a copy is not requested when such information is transmitted directly by the relevant supervisory authority to the relevant national central bank .

Such limits can also be applied to specific counterparties , in particular if the credit quality of the counterparty appears to exhibit a high correlation with the credit quality of the collateral submitted by the counterparty .

Such limits may also be applied to specific counterparties , in particular if the credit quality of the counterparty appears to exhibit a high correlation with the credit quality of the collateral submitted by the counterparty .'

Such measures can also be applied to specific counterparties , in particular if the credit quality of the counterparty appears to exhibit a high correlation with the credit quality of the collateral assets submitted by the counterparty .

Such exclusion can also be applied to specific counterparties , in particular if the credit quality of the counterparty appears to exhibit a high correlation with the credit quality of the collateral submitted by the counterparty .

( ) Concerning the second ECAI assessment , credit assessment at issuance refers to the credit assessment when first issued or published by the ECAI .'

Such limits can also be applied to specific coun terparties , in particular if the credit quality of the counterparty appears to exhibit a high correlation with the credit quality of the collateral submitted by the counterparty .

T Most importantly ... S Most importantly ...

Timing is important. Proximity is important.

Non financial corporate debtors or guarantors If the source selected by the counterparty provides a credit assessment equal to or exceeding the credit quality threshold , the debtor or guarantor is eligible ( 34 ) ( 35 ) .

34 In the case of marketable assets issued by non financial corporations but not rated by an accepted ECAI , this requirement applies to the credit assessment of issuers .

ECB Opinion on Community legislation on credit rating agencies operating in Europe