The BoE will broaden eligible collateral to include high-quality government-linked debt and adjust haircuts starting 19 June 2026.
The Bank of England will expand collateral eligibility in its Sterling Monetary Framework to include debt from G10 and Australian regional governments and development banks rated broadly equivalent to AA-. The changes, effective 19 June 2026, aim to support a repo-led operating framework for central bank reserves.
The update also revises minimum credit rating requirements for G10 government-guaranteed agency bonds, including securities from Freddie Mac, Fannie Mae, and the Federal Home Loan Banks System. Haircut adjustments accompany these broader operational changes, though the BoE typically does not announce such modifications separately.
The move follows feedback from a prior discussion paper and aligns with the BoE’s shift toward a demand-driven approach for supplying reserves.