Over half of central banks modified collateral policies during the pandemic
Most reduced haircuts on banks’ collateral
A majority of central banks changed their collateral policies during the pandemic, the Risk Management Benchmarks 2022 reveal.
Of 23 central banks that answered this question, 13 (57%) said they modified their lending operations. At least nine reduced haircuts on banks’ collateral.
A haircut is the difference between the current market value of an asset and the value ascribed to that asset for purposes of calculating loan collateral.
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