REGULATION · UK
Bank of England reviews CCP collateral rules; letters of credit guidance in focus
The BoE has launched a formal review of central counterparty collateral requirements, specifically addressing treatment of letters of credit as eligible collateral. Affects CCPs' risk frameworks and bank liquidity management.
WHY IT MATTERS
Regulatory review of collateral eligibility can shift bank treasury operations and systemic liquidity buffers; any tightening could force reallocation of £billions in collateral across UK and EU participants.
Source: Bank of England · 2026-10-15