Collateral Management and Open Market Operations

Collateral is the cornerstone of central bank operations, securing lending through open market operations (OMO), standing facilities, and Emergency Liquidity Assistance (ELA). Effective **collateral management** is essential to minimize credit risk while ensuring smooth liquidity provision and the effective transmission of monetary policy. This specialized course provides a comprehensive guide to the operational and risk management challenges of a central bank's collateral framework. Participants will delve into the complexities of collateral eligibility, valuation, haircut determination, legal enforceability, and the operational logistics of managing vast pools of diverse assets. The program covers the strategic trade-offs between a broad vs. restrictive collateral framework, its impact on market functioning, and the necessary IT infrastructure for real-time risk control.