The European Central Bank (ECB) has postponed the launch of the Eurosystem Collateral Management System (ECMS) by almost six months until April 2024.
The ECMS is a centralised collateral management facility for Eurosystem central banks that will replace collateral management operations currently conducted in the individual systems of 19 euro area national central banks, thereby harmonising and consolidating monetary policy collateral management operations across the Eurosystem.
Scheduled originally for 20 November 2023, the ECB Governing Council has postponed the ECMS launch until 8 April 2024, minimising potential disruption to the project created by the upgrade to T2, the Eurosystem’s real-time gross settlement and centralised liquidity management system.
The ECB took a decision on 22 October to delay the implementation of T2 from 21 November 2022 to 20 March 2023, justifying this extension on the grounds that it will provide greater system stability and enable a higher level of user readiness when this RTGS payments system upgrade does go live.
The ECB notes that although most users would have been ready for a November release of T2, others may not have fully completed their testing requirements. These problems were attributed to initial software deficiencies and “temporary unavailability” of the user testing environment.
In November, the ECB governing council opted to raise the overall limit for securities lending against cash collateral under its asset purchase programme and pandemic emergency purchase programme from €150 billion to €250 billion. This action was taken to ease potential pressures on high-quality collateral around the year-end.
The ECB has also extended the Eurosystem repo facility for central banks (EUREP) until 15 January 2024, indicating that there is continued value from a monetary policy standpoint in providing backstop euro liquidity lines via the EUREP framework. This programme was introduced during the pandemic and was previously scheduled to end on 15 January 2023.
Additionally, the Governing Council indicated that it will continue all existing temporary swap and repo lines with non-euro area central banks until 15 January 2024.
