We study how the Eurosystem Collateral Framework for corporate bonds helps the European Central Bank (ECB) fulfill its … due to the increased supply and demand for pledgeable collateral following eligibility, (i) securities lending market … collateral supply, thereby making the market more cohesive and complete. Following eligibility, bond-issuing firms reduce bank …

We study the eligibility of corporate bonds as collateral for central bank operations and its effect on interbank and … collateral policies must also account for endogenous responses of the corporate sector: banks increase demand for corporate bonds … if they are eligible as collateral, and firms increase their leverage and default risk in response. This has adverse …

I construct an infinite-horizon dynamic stochastic general equilibrium model with a collateral constraint and actual … taking into account the non-linear payoffs of the collateralized debt contracts and the scarcity of collateral, borrowers and … the senior tranche to the price of the junior tranche of collateral. Therefore, leverage is pro-cyclical if there is more …

theories that see collateral as a form of insurance, to be used only in extremis …

particular for collateral that saves more on regulatory capital …