This is particularly true if a guarantee in rem would be replaced by a blanket guarantee ad personam to a bank. Why then not allow a guarantee for all the banks to maintain financial stability. A cure all guarantee that a central bank must accept is a handover of money creation to the Government at EU or national level.
The acceptance of own used government-guaranteed bank bonds in the past was therefore rapidly be curtailed by the Governing Council of the ECB. Alongside “adequate collateral”, the second important layer of protection against the Eurosystem suffering potential loss is the requirement to interact only with financially sound counterparties.