Collateral


Danmarks Nationalbank extends credit to its account holders, primarily banks and mortgage banks, in the form of monetary-policy loans, credit for cash depots, and intraday credit in Danish kroner. Danmarks Nationalbank requires collateral for all types of credit facilities. The rules for asset eligibility are set out in Danmarks Nationalbank's terms and conditions for accounts. The following provides an outline of the arrangements for pledging of collateral that are available to account holders.

​Traditional pledging of collateral
Account holders may provide collateral for all types of credit facilities in Danish kroner by traditional pledging of securities as collateral. Traditional pledging of securities as collateral takes place by transfer of securities to a custody account at VP Securities pledged to Danmarks Nationalbank. Based on the value of the pledged securities, the account holder is allocated a drawing right for credit facilities in Danish kroner equivalent to the collateral value thereof. 

Other forms of collateral
For intraday credit in Danish kroner, account holders also have other options than traditional pledging of securities. Examples include:

  • Certificates of deposit – The account holder's certificates of deposit are automatically included in the drawing right for intraday credit in Danish kroner.
  • Automatic collateralisation – Account holders may pledge securities deposited in one or several custody accounts at VP, typically trading accounts, as collateral for intraday credit in Danish kroner. For more information, see "Terms and Conditions for a Collateral Rights Account at Danmarks Nationalbank", which are part of Danmarks Nationalbank's Terms and Conditions for accounts.
  • Scandinavian Cash Pool – Liquidity in one Scandinavian central bank may be pledged as collateral for intraday credit in another Scandinavian central bank.

Securities eligible as collateral in the euro area
Bonds issued through VP Securities and complying with the ECB's eligibility criteria may be pledged as collateral in the euro area when they have been approved and entered on the ECB's list of eligible assets. These securities must be approved by the central bank of the country in which the assets are listed, i.e. Danmarks Nationalbank for securities listed on NASDAQ OMX Copenhagen.​