Central Bank of Iceland counterparties and participants in the Bank’s interbank payment system may provide securities as collateral for authorised limits in payment systems and as security for collateralised loans when these are available.
Securities eligible as collateral for Central Bank facilities are subject to the provisions of Rules no. 1200/2019 (Icelandic), with subsequent amendments.
Settlement collateral in the form of securities provided for participation in payment systems is subject to the Central Bank rules on interbank payment systems as current at any given time; i.e., Rules no. 1030/2020 (Icelandic).
The Central Bank reserves the right to review its decision on eligibility of specified securities in light of the conditions prevailing at any given time.
Eligible securities for facilities and payment systems (updated weekly)
Eligible securites for facilities and payment systems ( updated weekly).csv
Assessment of securities values
In the valuation of securities as financial collateral for Central Bank facilities and participation in payment systems, a haircut shall be calculated on the reference price according to the table below:
| Residual maturity | < 2 yr | 2 - 5 yr | > 5 yr |
|---|---|---|---|
Government-issued bonds and bills | 1% | 3% | 5% |
Government-guaranteed securities | 1% | 3% | 5% |
Covered bonds** | 6% | 8% | 10% |
Other securities | 8% | 10% | 12% |
Financial institutions’ bond portfolios | 30% | 30% | 30% |
COVID support loans | 1% | 1% | 1% |
Terms deposit in payment system*** | 1% | 1% | 1% |
* If there is no market making with bonds, a 5% haircut is added.
** When an institution’s own securities are used, a 5% haircut is added.
*** Term deposits in payment systems may only be used for the minimum intraday balance.
If necessary – for example, due to market conditions – the Central Bank may calculate further deductions or haircuts. The Central Bank reserves the right to reject an application for facilities if no agreement can be reached on the pricing of collateral.