Securities eligible as collateral
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, 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.
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:
| Haircut on reference price* | |||
| 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% |
*No market making with bonds adds a 5% haircut
**When own securities are used, a 5% premium is added
***Terms deposit in payment system can only be used for minimum collateral requirement
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.