ECB paper on credit risk mitigation

The ECB Occasional Paper "Credit risk mitigation in central bank operations and its effects on financial markets: the case of the Eurosystem" reviews the role and effects of the collateral framework which central banks, and in particular the Eurosystem, use in conducting temporary monetary policy operations.

First, the paper explains the design of such a framework from the perspective of risk mitigation, which is the purpose of collateralisation. The paper argues that, by means of appropriate

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