The Swiss central bank no longer accepts bonds issued by some Irish banks as collateral in its liquidity operations after Moody's Investors Service last month lowered the country's credit rating by five levels.
The Swiss National Bank excluded securities issued by Allied Irish Banks, Anglo Irish Bank and Bank of Ireland from the list of assets it accepts as collateral for its repurchase operations, according to its website.
Moody's on December 17th cut Ireland's credit rating to Baa1 from Aa2, three levels above non-investment grade, after the country in November agreed to an €85 billion aid package to help stabilize its banks.
A country must have a minimum rating of Aa3 under SNB requirements.
The assets were taken off the list in line with the central bank's rules on securities deemed eligible for repo operations, SNB spokesman Werner Abegg said.
In a repo operation, a central bank provides market participants with liquidity in return for collateral. Both parties agree to reverse the deal at a later stage.
Bloomberg
