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The Bank of Japan's Eligible Collateral Framework and Recently Accepted Collateral

February 20, 2003
Kazuyoshi Ishiga
Yasuhei Okada
Takeshi Kato

The views expressed in the Review are those of the authors and do not necessarily represent the views of the Bank of Japan. Comments and questions as well as requests for hard copies should be addressed to Tokiko Shimizu, Manager, Financial Markets Department (tokiko.shimizu@boj.or.jp).

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The Bank of Japan completely revised its eligible collateral framework and related system infrastructure in late 2000 and early 2001. In June 2002, the Bank also began publicly releasing data on the outstanding levels of collateral accepted by the Bank. Eligible collateral is selected, with emphasis on "creditworthiness" and "marketability" in order to ensure the soundness of the Bank's assets. The range of instruments covers government bonds, financing bills, corporate bonds, bills, CP and other financial assets. The amount outstanding of accepted collateral, mainly consisting of government bonds, is presently approximately 65 trillion yen, of which nearly 50% is actually being used for liquidity provision by the Bank.