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SCP is an automatic system for cross-border pledging of collateral between Denmark, Norway and Sweden. The system was developed in order to facilitate the Scandinavian CLS participants’ access to intraday liquidity in the Scandinavian currencies.
The principles behind SCP
The main principle of SCP is that liquidity raised in one country’s central bank can be pledged as collateral for loans from another central bank. The participant pledges collateral by transferring liquidity to a special account that is pledged to the foreign central bank. The latter is informed automatically of the pledged amount in a SWIFT message, and on this basis provides credit to the participant. SCP is financed by its users, and is open to all account holders in the three Scandinavian central banks. SCP was implemented on 24 March 2003. |
