Friday May 22, 05:45 AM
TEXT-BOJ statement on collateral guidelines on foreign bonds
TOKYO, May 22 (Reuters) - The Bank of Japan slightly upgraded its assessment of the economy on Friday for the first time in nearly three years, while keeping interest rates on hold as it takes stock of some signs of recovery in the economy.
Following are excerpts from a statement on collateral guidelines on foreign bonds issued by the central bank after its two-day policy board meeting:
Establishment of 'Collateral Guidelines on Eligible Foreign Bonds'
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, with a view to further facilitating the Bank's money market operations in response to developments in financial markets, while ensuring the appropriate and efficient management of collateral, to take the following measures, and also decided, in view of the recent developments in domestic and overseas financial markets, to commence application of 'Collateral Guidelines on Eligible Foreign Bonds' from the day the guidelines become effective, with the aim of ensuring stability in financial markets through further facilitating money market operations.
1. Eligibility Standards
Publicly-offered bonds satisfying the following two requirements (the issuing country needs to be rated AA or higher by at least two rating agencies which the Bank considers to be appropriate):
(1) Bonds that are listed below.
a. Treasury Bonds, Treasury Notes, or Treasury Bills that are U.S. dollar-denominated bonds issued by the Federal Government of the United States of America
b. Conventional Gilts or Treasury Bills that are pound sterling-denominated bonds issued by the Government of the United Kingdom of Great Britain and Northern Ireland
c. Bunds (Bundesanleihen), Bobls (Bundesobligationen), Schatze (Bundesschatzanweisungen) or Bubills (Unverzinsliche Schatzanweisungen des Bundes) that are euro-denominated bonds issued by the Government of the Federal Republic of Germany
d. OAT (Obligations Assimilables du Tresor), BTAN (Bons du Tresor a interets annuels), or BTF (Bons du Tresor a taux fixe et a interet precompte) that are euro-denominated bonds issued by the Government of the Republic of France
(2) Bonds deemed appropriate in light of ensuring smooth business operation of the Bank and other relevant factors.
For full text click on:
http://www.boj.or.jp/en/theme/seisaku/allkettei/index.htm
(Compiled by Fumika Inoue)
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