ECMS: the harmonized management of collateral

Collateral Pool Management

Eurosystem credit operations are conducted on the basis of adequate collateral (Article 18 of the ESCB Statute). Eurosystem credit operations include:

  • monetary policy operations;
  • intraday credit in TARGET2 (T2);
  • intraday credit in TARGET2‑Securities (T2S), also referred to as auto‑collateralisation.

Adequate collateral refers to marketable assets (securities) and non‑marketable assets (bank loans) that meet the eligibility criteria established by the Eurosystem (so‑called eligible assets). The Eurosystem has defined harmonised rules for the mobilisation and management of collateral, which came into effect in June 2025 with the launch of the Eurosystem Collateral Management System (ECMS). Operational information for counterparties is described in the document Collateral management in Eurosystem credit operations – information for Eurosystem counterparties.

Banca d'Italia acquires collateral under a pledge arrangement. Collateral for monetary policy operations and intraday credit in T2 is managed using the pooling technique, whereby counterparties deliver collateral to a dedicated account (the pool account) opened at the Bank of Italy. The total value of collateral is allocated proportionally to outstanding credit operations, and a counterparty may release any collateral from the pool provided that the remaining value is sufficient to cover the outstanding financing.

Eligible marketable assets can be mobilised either through the domestic channel (where an Italian bank uses securities issued at the Italian central securities depository, Euronext Securities Milan) or cross‑border (where an Italian bank uses securities issued at CSDs other than the Italian one).

Cross‑border mobilisation of eligible marketable assets can take place through two main channels:

  • the Correspondent Central Banking Model (CCBM), based on correspondent relationships between central banks;
  • links between central securities depositories (CSD links).

Eurosystem Collateral Management System (ECMS)

ECMS, launched on 16 June 2025, is the shared technical platform used by the national central banks (NCBs) for the centralised management of collateral for Eurosystem operations (monetary policy refinancing operations and intraday credit in T2).

ECMS complements the Eurosystem market infrastructure framework by facilitating efficient liquidity and collateral management, thereby contributing to market integration, financial stability, and ultimately the Capital Markets Union.

The platform replaced the IT procedures previously used by the NCBs to provide a harmonised service to counterparties. ECMS is operated jointly by Deutsche Bundesbank, Banque de France, Banca d'Italia and Banco de España (the so-called 4CB).
Contractual and operational relationships with counterparties, central securities depositories (CSDs), and triparty agents remain the responsibility of the individual NCBs.

ECMS provides advanced and harmonised functionalities, including:

  • the use of the ISO 20022 standard for message exchange;
  • integration with other Eurosystem infrastructures, in particular T2 and TARGET2‑Securities;
  • settlement of monetary policy operations;
  • mobilisation, valuation and safekeeping of collateral, both domestically and cross‑border;
  • interactions with counterparties, CSDs and triparty agents (see Triparty Service);
  • management of collateral for the issuance of bank drafts.

Counterparties wishing to participate in ECMS may consult the Guida ECMS.

The Eurosystem has promoted initiatives to harmonise market practices of banks, CSDs, and triparty agents in areas relevant to ECMS, such as adopting ISO 20022 for corporate actions and triparty services. These activities are carried out within the Advisory Group on Market Infrastructures for Securities and Collateral (AMI‑SeCo) and are set out in the Single Collateral Management Rulebook for Europe (SCoRE).

Auto‑Collateralisation in TARGET2‑Securities

Auto‑collateralisation is a service offered by central banks to participants in the TARGET2‑Securities settlement platform to improve the efficiency and smoothness of securities settlement.

Under this mechanism, and pursuant to a specific contract with the Bank of Italy, a participant temporarily lacking liquidity to purchase a security may obtain intraday credit from the central bank by pledging as collateral either the security being purchased or other securities held, thereby enabling settlement of the transaction. Collateral eligible for auto‑collateralisation is automatically selected and valued by the T2S platform using the same criteria and controls applied by the Eurosystem for other forms of financing.

Collateral Provided for Other Purposes

In addition to Eurosystem credit operations, other transactions require eligible collateral. These include the issuance of bank drafts: banks are required to provide a guarantee in the form of securities deposited with Banca d'Italia.

Contacts

Directorate General for Payments and Market Infrastructure
Payment Systems Directorate — Collateral Management Systems Division
Via Pastrengo, 14 – Rome
Tel: +39 06.4792.3868
Email: ECMS@bancaditalia.it

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