Correspondent Central Banking Model (CCBM)

The Correspondent Central Banking Model (CCBM) was established by the Eurosystem along with the euro in January 1999 to assure that the assets eligible in monetary policy operations and intraday credit transactions could be used by all counterparties in the Eurosystem, regardless of where those assets or counterparties are located.

The CCBM is based on the principle of decentralising access to credit, which means that Eurosystem counterparties can only obtain credit from the lending central bank of the country where they are based (Home Central Bank or HCB).

CCBM was designed as a medium-term solution until alternative market solutions became available: links between securities settlement systems (SSSs), for which use in Eurosystem operations must be deemed eligible by the Governing Council of the European Central Bank (ECB). Counterparties may use these links in combination with the CCBM for the purposes of Eurosystem credit operations.

The mobilisation of marketable assets requires that counterparties agree to use CCBM through instructions to one of the following:

  • Issuer SSS: the settlement system in which the securities were issued.
    (General CCBM model)
  • Investor SSS: the settlement system in which the securities have been registered, provided there is an eligible link between the issuer and investor system. 
    (CCBM model with links)
  • Triparty agent of the enabled model, from 29 September 2014.
    (CCBM model with triparty service)                   

Mobilisation of non-marketable assets not governed by the domestic law of the HCB is also conducted through CCBM, using a specific procedure. Generally, the correspondent central bank (CCB) is the national central bank of the country whose legislation governs these assets.

When using CCBM, counterparties should be aware that market practices may vary across countries. Eurosystem counterparties may use a range of collateralisation techniques (repo, pledge, assignment and floating charges) and different methods for holding the collateral (pooling or earmarking systems). If the CCB were to offer several techniques, the technique applied will that chosen by the HCB, taking account of the CCB's preferences. The responsibility for choosing the method of maintaining the collateral lies solely with the HCB

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