The role of loans and the ICAS BE in the Eurosystem’s collateral framework in 2025

Rationale This article analyses how the share of non-marketable assets (basically bank loans) pledged as collateral in the Eurosystem’s monetary policy credit operations has changed over the last 12 months, homing in on the actual and potential contribution of the Banco de España’s in-house credit assessment system (ICAS BE). Takeaways •In the last 12 months the share of non-marketable assets in the collateral pledged by Spanish counterparties in Eurosystem financing operations has held steady, after growing for several years in the wake of the COVID-19 crisis. The proportion of non-marketable assets accounted for by loans to firms assessed using the ICAS BE has continued to grow for the third consecutive year, albeit more moderately. •Counterparties continue to have ample scope to increase the volume of ICAS BE-rated loans pledged, especially in the case of loans to small and medium-sized enterprises (SMEs). •Credit ratings assigned by the ICAS BE to Spanish firms have remained largely unchanged from last year, as higher financing costs have been offset by a slight improvement in the other areas assessed, particularly liquidity.