On 15 October the ECB massively expanded the set of
securities that it accepts as collateral.
All securities should be accepted as collateral, given severe
enough valuations and haircuts.
The ECB should be more transparent in explaining how it
values illiquid securities as collateral.
The ECB could use a reverse auction to value securities but it
should avoid outcomes with fire sale prices.
Crisis conditions mean that the Eurosystem could need
recapitalisation; an automatic arrangement to provide this
should be in place