On changing approaches to compiling Bank of Russia Lombard List

The Bank of Russia increases requirements for security on its operations as part of a countercyclical approach to compiling its Lombard List. With due regard to the expected liquidity surplus in the medium term and sufficient security, the Bank of Russia took the following decisions.

1. From 1 October 2017, the Bank of Russia suspends including in its Lombard List the following new securities issues:

bonds of credit institutions [1] and Vnesheconombank;

bonds of insurance companies;

bonds of international finance organisations;

debt securities issued by non-resident legal entities outside the Russian Federation whose beneficiaries or final borrowers are Russian credit institutions and insurance companies and Vnesheconombank.

Should any changes associated with the increase in the volume of bonds of the aforementioned finance organisations included in the Lombard List or the altering date/conditions of their redemption be registered/approved in the period from 7 July 2017 to 1 July 2018, the Bank of Russia will consider a possible suspension of using the respective issues of bonds in its refinancing operations. 2.From 1 October 2017, securities of the aforementioned finance organisations included in the Lombard List will see gradual decrease in their adjustment ratios / increase in their discounts:

from 1 October 2017, the respective values of adjustment ratio will be decreased by 0.1 / the values of discounts will be increased by 10 percentage points;

from 1 January 2018, the effective values of adjustment ratio will be decreased by 0.2 / the values of discounts will be increased by 20 percentage points;

from 1 April 2018, the effective values of adjustment ratio will be decreased by 0.2 / the values of discounts will be increased by 20 percentage points;

from 1 July 2018, Bank of Russia lending and repo operations with the said securities will be suspended.

3. The Bank of Russia Board of Directors decided to exclude bonds of credit institutions and insurance companies, which are not eligible as security on liquidity-provision operations, from the Lombard List from 10 July 2017.

The Bank of Russia constantly monitors free security in the banking sector to refinance credit institutions and, if necessary, is prepared to react flexibly to changes in the market situation.

^[1] The decision does not cover mortgage-backed bonds issued by credit institutions. These securities can also be included in the Lombard List after 30 September 2017.

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07.07.2017 00.00.00