The decision to temporarily relax the criteria for eligibility as collateral, while continuing to apply adequate risk control measures, was related to the significantly increased role played by the ECB in providing liquidity.
During the first two phases of the turmoil (and a fortiori under normal circumstances), the wide range of assets eligible as collateral guarantees that availability of collateral does not become a constraint for banks’ participation at the ECB’s credit operations. Indeed, historically, there has been a significant degree of over-collateralisation in the euro area.