This workshop will focus on the role of collateral pre-positioning within a central bank’s collateral framework. Pre-positioning is a process that starts with the provision of information to the central bank about bank assets. The central bank then assesses the eligibility of these assets and establishes the amount of liquidity that the bank can borrow against them (ie the haircut). The central bank also establishes the robustness of its legal rights to secure the assets when lending against them. Finally, these assets enter a pool – of pre-positioned collateral – against which the bank can borrow. As a form of preparation for banks’ potential liquidity needs, pre-positioning is particularly relevant if central banks choose to accept a wide set of eligible collateral, some of which takes time to assess and value.
The workshop is organised as follows. Day 1 sessions will cover the objectives and policy trade-offs associated with pre-positioning frameworks, with participants from central banks, academia and the industry. Day 2 sessions will cover the operationalisation of central bank collateral frameworks and the challenges associated with designing pre-positioning frameworks, with participants from central banks only. The Chatham House Rule will apply.