ECB Covered Bond and ABS Purchase

Ranjan Kumaran made this access to documents request to European Central Bank

The request was refused by European Central Bank.

From: Ranjan Kumaran

Delivered

Dear European Central Bank,

Under the right of access to documents in the EU treaties, as developed in Regulation 1049/2001, I am requesting documents which contain the following information:

In September 2014, the ECB announced two new purchase programmes, namely the ABS purchase programme (ABSPP) and the third covered bond purchase programme (CBPP3)

Please release a country by country, bank by bank, and product by product breakdown of all ECB purchase programme expenditure to date including prices paid for securities, quantities purchased, brokerage and / or clearing house arrangements including fees, and the relevant ISIN codes.

Yours faithfully,

Ranjan Kumaran

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From: Secretariat Inbound e-mails

Dear Mr Kumaran,
 
The ECB hereby confirms receipt, on 15 December 2014, of your application
for access to documents as outlined in your below e-mail.
Please note that access to ECB documents is governed by Decision
ECB/2004/3 (the unofficial consolidated version of this Decision is
available on the<ECB website
<[1]http://www.ecb.europa.eu/ecb/legal/pdf/0...> >).
 
Your request has been registered and a reply will be provided to you in
line with Decision ECB/2004/3, i.e. by 16 January 2015.
 
Yours faithfully,
DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main

[2][email address]
 
 

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From: Secretariat Inbound e-mails

Dear Mr Kumaran,
 
We should like to inform you that we are still processing your application
and are not yet in a position to provide you with our assessment. We aim
to send you a response in the course of next week.
 
 
Yours faithfully,
DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main

[1][email address]
 
_____________________________________________
From: Secretariat Inbound e-mails
Sent: 16 December 2014 13:47
To: '[FOI #1647 email]'
Subject: RE: access to information request - ECB Covered Bond and ABS
Purchase
 
 
Dear Mr Kumaran,
 
The ECB hereby confirms receipt, on 15 December 2014, of your application
for access to documents as outlined in your below e-mail.
Please note that access to ECB documents is governed by Decision
ECB/2004/3 (the unofficial consolidated version of this Decision is
available on the<ECB website
<[2]http://www.ecb.europa.eu/ecb/legal/pdf/0...> >).
 
Your request has been registered and a reply will be provided to you in
line with Decision ECB/2004/3, i.e. by 16 January 2015.
 
Yours faithfully,
DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main

[3][email address]
 
 

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From: Ranjan Kumaran

Delivered

Dear European Central Bank,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of European Central Bank's handling of my FOI request 'ECB Covered Bond and ABS Purchase'.

I have waited more than 15 working days but I haven't received the spreadsheet. I am sure you have the information to hand and can't think of why you wouldn't be able to send the data over in the space of a few minutes.

I assume your regulatory procedures obligate you to count and track what the ECB buys and at least some detail for each transaction.

Please tell me why you aren't promptly responding. Are you experiencing management / organisational issues or merely technical problems?

A full history of my FOI request and all correspondence is available on the Internet at this address: http://www.asktheeu.org/en/request/ecb_c...

Yours faithfully,

Ranjan Kumaran

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From: Secretariat Inbound e-mails


Attachment PA 2014 41 LS PvdH 15 04 reply to application.pdf
127K Download View as HTML


Dear Mr Kumaran,
 
Please find enclosed the reply from the ECB’s DG Secretariat to your
request for access to ECB documents, with apologies for the delay in
sending our response.
Yours faithfully,

DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main

[1][email address]
 
 
 
 

 

Any e-mail message from the European Central Bank (ECB) is sent in good
faith but shall neither be binding nor construed as constituting a
commitment by the ECB except where provided for in a written agreement.
This e-mail is intended only for the use of the recipient(s) named above.
Any unauthorised disclosure, use or dissemination, either in whole or in
part, is prohibited. If you have received this e-mail in error, please
notify the sender immediately via e-mail and delete this e-mail from your
system.

 

References

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1. mailto:[email address]

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From: Ranjan Kumaran

Delivered

Dear Secretariat Inbound e-mails,

The file I have received is in an unreadable format.

Please provide reply disclosure in either HTML or any other format that can be read by screen readers.

Yours sincerely,

Ranjan Kumaran

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From: Secretariat Inbound e-mails


Attachment image001.jpg
1K Download

Attachment image002.png
0K Download

Attachment image004.jpg
3K Download

Attachment image005.png
13K Download


Dear Mr Kumaran

Please see below the ECB’s response to you of 30 January 2015 in HTML
format.

Should you continue to encounter problems please let us know.

Yours faithfully,

 

DG Secretariat

European Central Bank

Sonnemannstrasse 20

60314 Frankfurt am Main

 

[1][email address]

 

 

[2]cid:image001.jpg@01D04211.9C6F4700

 

EUROPEAN CENTRAL BANK

[3]cid:image002.png@01D04211.9C6F4700

EUROSYSTEM

Directorate General Secretariat

 

Mr Ranjan Kumaran

ask+request-1647-d070225b@ asktheeu.org

ECB-UNRESTRICTED

30 January 2015

LS/PvdH/15/04

Dear Mr Kumaran,

Request for public access to ECB documents

On 13 December 2014 the European Central Bank (ECB) received your request
to " release a country by country, bank by bank, and product by product
breakdown of the (ABSPP and CBPP3) ECB purchase programme expenditure to
date including prices paid for securities, quantities purchased, brokerage
and I or clearing house arrangements including fees, and the relevant /SIN
codes".

We confirm that such data is available in an internal database used for
the production of confidential internal reports. However, following a
thorough assessment of your request in line with the requirements of the
Decision of the European Central Bank of 4 March 2004 on public access to
European Central Bank documents1 (Decision ECB/2004/3), the ECB considers
that the specific data you are interested in cannot be disclosed as it is
protected under the provisions of the second indent of Article 4(1)(a)
("the financial, monetary or economic policy of the Union or a Member
State”) and the first indent of Article 4(2) ("the commercial interests of
a natural or legal person, including intellectual property”) of Decision
ECB/2004/3.

First, we should like to recall that the aim of the Asset-Backed
Securities Purchase Programme (ABSPP) and Covered Bond Purchase Programme
3 (CBPP3) is to "further enhance the transmission of monetary policy,
facilitate credit provision to the euro area economy, generate positive
spill-overs to other markets and, as a result, ease the ECB's monetary
policy stance, and contribute to a return of inflation rates to levels
closer to 2%"2 • As such, these two programmes are part of the
non-standard monetary policy measures the ECB has established in recent
years.

As regards the financial instruments i.e., the securities which have been
purchased to date (including the country by country, bank by bank, and
product by product breakdown of quantities, ISIN codes, brokerage or
clearing house arrangements, including fees), the ECB holds the view that
the disclosure of detailed information on individual holdings would reveal
which financial instruments have been bought and which not, as well as the
issuers involved. While the distribution of purchases across issuers,
types of financial instruments and other dimensions in fact merely
reflects the market conditions at the time of the purchases and the
intention to maximise the impact of interventions on the stance and
general credit conditions, while minimising distortions in market prices,
information on such distribution may lead to market fragmentation and
undermine the level playing field among issuers and originators, thereby
contrasting the ECB's intention of supporting the functioning of the
relevant markets. For example, the disclosure of the names of issuers of
covered bonds and originators of asset-backed securities effectively
bought is very likely to cause an increased differentiation in spreads in
favour of those issuers/originators whose financial instruments have been
purchased by the Eurosystem. This, in turn, would undermine the financing
efforts of the issuers whose financial instruments have not been
purchased. Furthermore, the disclosure of these names may be perceived by
the market as indicating a differentiation between financially sound and
weak issuers and originators. This would undermine the Eurosystem's
efforts to restore confidence in the financial markets and to enhance the
transmission of monetary policy impulses.

Similarly, in the light of the fact that some countries' markets in these
assets are quite small, country-level disclosure could also reveal
information on instrument or issuer level, which would be unwarranted for
the reasons explained above. Thus, the ECB is of the opinion that a
disclosure of the requested data pertaining to active programmes would
challenge the efficiency of these programmes and the effectiveness of the
non-standard monetary policy operations initiated by its Governing
Council.

Second, the disclosure of the data which you have requested would
undermine the protection of the commercial interests of the ECB's
counterparties, including those of the four executing asset managers
{hereinafter "Managers"} appointed contractually under the ABSPP. In
keeping with the standard practice for conducting monetary policy
operations, the Eurosystem considers it important to protect the
confidentiality of individual transaction data with and relating to its
counterparties, as the disclosure of such information may be harmful to
their commercial interests (as mentioned above). Furthermore, the
disclosure of the contractual arrangements with the Managers or the
clearing company, including their respective fees, would undermine the
protection of their commercial interests. In this respect, there are no
special clearing arrangements for the bonds and asset-backed securities
covered by the two programmes and standard market practices and procedures
are followed in each case.

There is also no overriding public interest in this disclosure.

In addition, in relation to brokerage and I or clearing house arrangements
including fees, the appointment of the Managers for the ABSPP followed a
competitive negotiated tender procedure. Moreover, the purchasing
transactions of the Eurosystem and the Managers (on the ECB's
instruction), are executed and settled in accordance with a dealing and
best execution policy that is based on applicable EU regulatory standards
and obligations for market participants.

We should like to inform you that, with a view to further increasing the
level of transparency regarding the programmes, the ECB provides on a
weekly basis details on securities holdings at amortised cost. This
information is published in the consolidated weekly financial statement of
the Eurosystem and on the open market operations webpage. In addition,
information on the weighted average remaining maturity by issuer is
released on a monthly basis.

The above-mentioned information is available on the ECB'[4]s website via
the links below:

https://www.ecb.europa.eu/mopo/implement... [5](Open market operations
page)

https://www.ecb.europa.eu/mopollig/html/...
[6](Liquidity analysis page)

https://www.ecb.europa.eu/press/pr/wfs/2... (Weekly
financial statements page)

http://www.ecb.europa.eu/press/pr/date/2... pr141030 1.en.html
(Press release on the Managers)

Moreover, the list of financial instruments eligible for purchase by the
Eurosystem is a subset of financial instruments eligible for monetary
policy operations- information on these is published on the ECB's website
and updated on a daily basis. This is line with the decision of the
Governing Council (see Article 2 of Decision ECB/2014/40 of 15 October
2014 and Article 2 of Decision ECB/2014/45 of 19 November 2014), according
to which financial instruments purchased under the programmes need to be
eligible for monetary policy operations (as defined in Guideline
ECB/2011/14 (as amended by Guideline ECB/2012/25 and Guideline/2014/10)
and Decision ECB/2013/35 of 26 September 2013).

For the sake of good order, please note that Article 7(2) of Decision
ECB/2004/3 provides that "in the event of total or partial refusal, the
applicant may, within 20 working days of receiving the ECB's reply, make a
confirmatory application asking the ECB's Executive Board to reconsider
its position".

Yours sincerely,

[8]cid:image005.png@01D04211.9C6F4700                                                                                                  
            [9]cid:image004.jpg@01D04211.9C6F4700

Pierre van der
Haegen                                                                                                                                      
            Roman Schremser

 

Director
General                                                           
                                                                                   
            Senior Adviser

 

 

 

Official Journal of the European Union L 80/42, 18 March 2004, as amended
by Decision ECB/2011/6 of 9 May 2011, Official

Journal of the European Union L 158/37, 16 June 2011.

Please refer to ECB Decision ECB/2014145 of 19 November 2014 on the
implementation of the asset-backed securities purchase programme, Official
Journal of the European Union L 1/4, 6 January 2015 (ABSPP) and to
Decision ECBf2014/40 of

15 October 2014 on the implementation of the third covered bond purchase
programme, Official Journal of the European Union

L 335/22, 22 November 2014 (CBPP3).

Sonnemannstrasse 20 - 60314 Frankfurt am Mam · Germany [10]·
[11][email address]

 

 

Any e-mail message from the European Central Bank (ECB) is sent in good
faith but shall neither be binding nor construed as constituting a
commitment by the ECB except where provided for in a written agreement.
This e-mail is intended only for the use of the recipient(s) named above.
Any unauthorised disclosure, use or dissemination, either in whole or in
part, is prohibited. If you have received this e-mail in error, please
notify the sender immediately via e-mail and delete this e-mail from your
system.

 

References

Visible links
1. mailto:[email address]
4. http://www.ecb.europa.eu/mopo/implement/...
5. http://www.ecb.europa.eu/mopollig/html/i...
6. http://www.ecb.europa.eu/press/pr/wfs/20...
7. http://www.ecb.europa.eu/press/pr/date/2...
10. mailto:[email address]
11. mailto:[email address]

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From: Ranjan Kumaran

Delivered

Dear European Central Bank,

Thank you for your response to my Freedom of Information Request
regarding the ECB Covered Bond and Asset-Backed Security Purchase
Program. I asked for a full list of Eurozone countries and Banks
that have been favoured by the ECB and how much money each has
received.

The ECB’s reluctance to disclose any of the data and policies
concerning the countries and banks with whom it has been doing
business makes the Bank appear guilty of a cover-up.

Your response stated:

the disclosure of the names of issuers of covered bonds and
originators of asset-backed securities effectively bought is very
likely to cause an increased differentiation in spreads in favour
of those issuers/originators whose financial instruments have been
purchased by the Eurosystem. This, in turn, would undermine the
financing efforts of the issuers whose financial instruments have
not been purchased. Furthermore, the disclosure of these names may
be perceived by the market as indicating a differentiation between
financially sound and weak issuers and originators. This would
undermine the Eurosystem's efforts to restore confidence in the
financial markets and to enhance the transmission of monetary
policy impulses.

According to a Bloomberg article:

http://www.bloomberg.com/news/articles/2...

The ECB has bought covered bonds from Portugal to Germany as well as Dutch Mortgage Backed Securities.

Is the Bloomberg article factually correct?

Which were the securities that were deemed eligible for the
purchase programs? How were these decided upon? Does the Bank possess evidence of these conversations? Is any of the evidence articulated in written form? Please make this evidence publicly available.

What criteria did the ECB apply to select which of the eligible
securities would be chosen for the purchase program? How were the competing methodologies decided upon? Does the Bank possess evidence of these discussions? Is any of the evidence articulated in written form? Please make this evidence publicly available.

Were the selected securities sourced exclusively from financially
sound or financially weak originators or was credit quality not the
primary influence when making purchase decisions?

How were these decisions arrived at? Which parties were involved? Does the Bank possess any evidence of these discussions? Is any of it articulated in written form? Please make this evidence publicly available.

As much of the collateral that backs up the Covered Bonds and ABS in the purchase program is derived from Public Sector (PFI /PPP) loans, mortgage loans, Car Loans and Credit Card debt, please state how much Euro area loan exposure in these securities is sourced from lending to the UK and how much is sourced from lending to each of the other Euro Area countries.

I assume this is information that the Bank holds. It will have
received this information from credit rating agencies before buying
the bonds. Please identify which agencies the Bank used to rate each security it purchased. Does the Bank possess evidence of these consultations? Please make all evidence of these consultations publicly available. Who was involved? What shape did the consultations take?

If the Bank were to hold senior and then riskier tranches of
Mezzanine debt then, in the case of the UK, does this mean the Bank would potentially be exposed to UK municipal lending and to UK PFI projects?

To which UK and European municipal lending and PFI projects is the ECB exposed? By how much for each project?

Could this exposure mean the ECB might, at some stage, receive
money from loans being repaid by UK NHS Foundation Trust hospitals and from British schools, roads, and housing associations?

As holders of senior debt does that also mean that, in the case of a UK NHS Foundation Trust bankruptcy, the Bank could be fully repaid whilst Hospitals are closed?

Could the same also apply to ECB exposure to other Euro area
countries?

Which German and Portuguese covered bonds does the ECB hold?

To which projects, mortgages, or public sector loans are the ECB's
German and Portuguese Covered Bonds exposed?

In the interests of transparency and in order to dispel the notion
of wrongdoing please answer these questions and provide the
identities of the brokers the ECB used to carry out these
transactions and the fees that were charged for doing so.

It was stated in your reply at the end of January that disclosure was not in the Public Interest. I disagree. Everyone I have asked about this matter has expressed interest in disclosure.

Especially since the late January announcement of a further trillion Euro QE programme involving both sovereign and private sector debt.

Many people feel excluded from the decision making process and that it is going ahead without their consent. Your assertion that disclosure is not in the public interest was itself made without public consultation or consent.

Please provide details of who was consulted over this matter and evidence of more than viewpoint.

I don't think that most Euro Area citizens believe that commercial confidentiality over the use of public money is good for business.

Many see it as a sign of corruption - an abuse of power.

Please reconsider your approach to transparency and your attitude to citizens in Europe.

Please provide all answers in a pdf format and in a format that is readable on a screen reader such as HTML.

Yours faithfully,

Ranjan Kumaran

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From: Ranjan Kumaran

Delivered

Dear Secretariat Inbound e-mails,

Please confirm whether or not you acknowledge receipt of my request for an internal review which I sent on the 27th February 2015.

Yours sincerely,

Ranjan Kumaran

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From: Secretariat
European Central Bank

Dear Mr Kumaran,

The ECB confirms receipt, on 27 February 2015, of your confirmatory application for access to documents (which were specified in your initial request of 13 December 2014) based on your argument that disclosure of the initially requested documents is in the Public Interest.

Your request has been registered and a reply will be provided to you in line with Decision ECB/2004/3, i.e. by 26 March 2015.

All other questions included in your e-mail of 27 February 2015 would be addressed by the ECB separately.

Yours faithfully,

DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main

[email address]

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From: Secretariat Inbound e-mails


Attachment PA 2014 41 LS MD 2015 188 ECB reply Request for access to ECB documents confirmatory application.pdf
87K Download View as HTML


Dear Mr Kumaran,
 
Please find enclosed the reply from the ECB President to your confirmatory
application of 27 February 2015 for access to ECB documents.
 
Yours faithfully,
 
DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main
 
[1][email address]
 
 
 
 
 

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From: Secretariat Inbound e-mails


Attachment ATT58112 5.jpg
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Dear Mr Kumaran,
Further to our e-mail of yesterday enclosing the ECB President’s reply to
your confirmatory application of 27 February 2015 in pdf format, please
now see below the same letter in HTML format.
Yours faithfully,
DG Secretariat
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main
[1][email address]
 
EUROPEAN CENTRAL BANK
EUROSYSTEM
Mario Draghi
President
Mr Ranjan Kumaran
[2][FOI #1647 email]
ECB-UNRESTRICTED
Frankfurt, 25 March 2015
LS/MD/2015/188
Request for public access to ECB documents
Dear Mr Kumaran,
On 27 February 2015 the European Central Bank (ECB) received your
confirmatory application for a review of your initial public access
request (to "release a country by country, bank by bank, and product by
product breakdown of the (ABSPP and CBPP3) ECB purchase programme
expenditure to date,including prices paid for securities, quantities
purchased, brokerage and/or clearing house arrangements including fees,
and the relevant /SIN codes") arguing that disclosure of the initially
requested data is in the public interest.
 
The Executive Board has given careful consideration to your confirmatory
application as well as the assessment made and the decision taken with
respect to the response to your initial application request in line with
the requirements of the Decision of the European Central Bank of 4 March
2004 on public access to European Central Bank documents ^ 1 (Decision
ECB/2004/3). Following this review, the Executive Board upholds the
assessment of the Director General Secretariat, as laid down in his letter
of 30 January 2015. It, therefore, cannot grant full or even partial
access to the data requested, as such data is protected under the
provisions of the second indent of Article 4(1)(a) ("the financial,
monetary or economic policy of the Union or a Member State”) and the first
indent of Article 4(2) ("the commercial interests of a natural or legal
person, including intellectual property”) of Decision ECB/2004/3.
 
First, the Executive Board should like to recall that the aim of the
asset-backed securities purchase programme (ABSPP) and the covered bond
purchase programme 3 (CBPP3) is to "further enhance the transmission of
monetary policy, facilitate credit provision to the euro area economy,
generate positive spill-overs to other markets and, as a result, ease the
ECB's monetary policy stance, and contribute to a return of inflation
rates to levels closer to 2%".^2  As such, these two programmes are part
of the non-standard monetary policy measures that the ECB has established
in recent years. Details on the financial instruments, including the
eligibility criteria of the ABSPP and/or the CBPP3, are publicly available
on the ECB's website in the underlying legal documentation and
supplementary communications.^3  Eligible financial instruments that are
considered for purchase as part of the ABSPP are subject to credit risk
assessment and due diligence by the ECB in accordance with Article 3 of
Decision ECB/2014/45 on the implementation of the asset-backed securities
purchase programme.
Release of the requested data on the securities which have been purchased
to date under the ABSPP and CBPP3 programmes would allow for specific
financial instruments as well as the issuers involved to be identified.
The Executive Board holds the view that this could undermine the explicit
purpose of these programmes. In fact, the distribution of purchases across
issuers, types of financial instruments and other dimensions merely
reflects the market conditions at the time of the purchases and the
intention to maximise the impact of interventions on the monetary policy
stance and general credit conditions, while minimising distortions in
market prices. While the ECB, with its purchases, strives for market
neutrality, the disclosure of information on such distribution carries the
risk of misinterpretation by market participants, who may assume that the
data reflect structural features of the programmes, rather than the mere
temporary distribution of the purchases in view of the existing market
conditions at that given moment in time, or even mistakenly assume that
the ECB's asset managers hold privileged information on specific issuers
or originators. For example, the disclosure of the names of issuers of
covered bonds and originators of asset-backed securities effectively
bought is very likely to cause a, not necessarily justified,
differentiation in spreads in favour of those issuers/originators whose
financial instruments have been purchased by the Eurosystem. This, in
turn, could undermine the financing efforts of the issuers whose financial
instruments have not been purchased. Furthermore, the disclosure of these
names could be perceived by the market as indicating a differentiation
between financially sound and financially weak issuers and originators.
This could ultimately introduce unwanted volatility and distortions in the
market, which could undermine the protection of the public interest as
regards the monetary policy of the European Union, including the
transmission of monetary policy impulses, as well as of the commercial
interests of such issuers and originators (please refer to the protection
of commercial interests outlined below).
Having considered the above-mentioned consequences of disclosure, the
Executive Board concludes that it cannot grant full or even partial access
to the requested data (including country level data pertaining to the
ABSPP and the CBPP3), as this would undermine the Eurosystem's explicit
aim of restoring confidence in the financial markets and enhancing the
transmission of monetary policy impulses, thereby challenging the
efficiency of these programmes and the effectiveness of such non-standard
monetary policy operations initiated by the Governing Council.
The Executive Board wishes to underline that, as provided under Article
4(1)(a) ("the financial, monetary or economic policy of the Union or a
Member State”), the justification for the refusal to grant access to such
data is not limited by virtue of an overriding public interest.
Second, the disclosure of the data which you have requested could
undermine the protection of the commercial interests of the ECB's
counterparties and of the four executing asset managers (hereinafter
"Managers") appointed contractually under the ABSPP, as described on the
ECB's
website.^4  In keeping with the standard practice for conducting monetary
policy operations, the Eurosystem considers it important to protect the
confidentiality of individual transaction data on and relating to its
counterparties, as the disclosure of such information could be harmful to
their commercial interests (as mentioned above). Furthermore, the
disclosure of the contractual arrangements with the Managers or the
clearing company, including their respective fees, could undermine the
protection of their commercial interests. In this respect, there are no
special clearing arrangements for the bonds and asset-backed securities
covered by the two programmes and standard market practices and procedures
are followed in each case.
Based on the assessment of the content of these documents and taking into
account the argumentation provided by you (which failed to substantiate
such overriding public interest), the Executive Board has not identified a
public interest that would, in this instance, override the public interest
protected by virtue of the above-mentioned provision and thus justify the
disclosure of this data. It is, furthermore, not possible to grant partial
access to the requested data without undermining the commercial interests
protected by virtue of the first indent of Article 4(2) ("the commercial
interests of a natural or legal person, including intellectual property')
of Decision ECB/2004/3.
Finally, I should like to confirm that your further enquiries and requests
for information included in your e-mail of 27 February 2015 will be dealt
with separately by the ECB, as they fall outside of the scope of the
confirmatory application for a review of your initial application for
public access to ECB documents.
For the sake of good order, I should like to inform you that, under
Article 8(1) of Decision ECB/2004/3, in the event of total or partial
refusal, the applicant may have recourse to the remedies open to him/her
in accordance with Articles 263 and 228 of the Treaty on the Functioning
of the European Union.
Yours sincerely,
1     Please see the Official Journal of the European Union L 80/42, 18
March 2004, as amended by Decision ECB/2011/6 of 9 May 2011. Official
Journal of the European Union L 158/37, 16 June 2011.
2     Please see ECB Decision ECB/2014/45 of 19 November 2014 on the
Implementation of the asset-backed securities purchase programme, Official
Journal of the European Union L 1/4,6 January 2015 (ABSPP) and Decision
ECB/2014/40 of 15 October 2014 on the implementation of the third covered
bond purchase programme, Official Journal of the European Union L 335/22,
22 November 2014 (CBPP3).
^3               Please see:
[3]http://www.ecb.europa.eu/press/pr/date/2...
and
[4]https://www.ecb.europa.eu/press/pr/date/...
 
^4       See the press release of 30 October 2014 entitled “ECB appoints
executing asset managers for the ABS Purchase Programme”
[5]http://www.ecb.europa.eu/press/pr/date/2....
 
 
Address
European Central Bank
Sonnemannstrasse 20
60314 Frankfurt am Main
Germany
 
Tel.: +49 69 1344 7300
Fax: +49 69 1344 7305
E-mail[6]: [7]office[8].[email address]
Website[9]: [10]www.ecb.europa.eu
Postal address
European Central Bank
60640 Frankfurt am Main
Germany
 
 
 
 
 

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Link to this

From: ECB Information
European Central Bank

Dear Mr Kumaran,

 

Further to your e-mail of 27 February 2015 to the ECB’s Directorate
General Secretariat and as announced in the letter of the ECB’s Executive
Board, dated 25 March 2015, informing you about the outcome of its review
of your initial application for public access to ECB documents, we would
like to respond herewith to those of your questions which fall outside of
the scope of your confirmatory application.

 

While the ECB does not elaborate on news articles or commentaries, we
would like in particular to draw your attention to the fact that details
relating to the criteria on financial instruments eligible under the
asset-backed securities purchase programme (ABSPP) and the covered bond
purchase programme CBPP3 are publicly available on the ECB’s website and
are outlined in the following documentation: [1]Public guideline on the
ABSPP, [2]Press release on ABSPP and CBPP3, [3]Technical annex to the
press release, [4]Public Q and A on CBPP3 and [5]Public legal act on
CBPP3.

 

To be specific, the eligibility criteria relating to the ABSPP and CBPP3
are outlined in Articles 2 of the [6]public legal act on CBPP3 and the
[7]public guideline on the ABSPP, respectively. Moreover, eligible
financial instruments which are considered for purchases as part of the
ABSPP are subject to credit risk assessment and due diligence by the ECB
in accordance with Article 3 of [8]the ECB's decision ECB/2014/45 on the
implementation of the ABSPP. We also would like to point out that the
issuers of the ABSs eligible for the ABSPP must be established in the euro
area (Article 2 of ECB/2014/45) and for the CBPP3 covered bonds must be
issued by credit institutions incorporated in the euro area as well
(Article 2 of ECB/2014/40). Thus, your reference to issuer residence in
the UK is not applicable.

 

Details on the internal preparations relating to the above-mentioned
purchase programmes are not publically available. Moreover, for the
reasons explained in the ECB’s response to your public access request,
detailed and disaggregated information on the above-mentioned purchases
cannot be provided. However, aggregated quantitative information on the
ECB’s active programmes can be found on the ECB’s website
([9]www.ecb.europa.eu/mopo/liq/html/index.en.html) and in the ECB’s weekly
financial statement
([10]www.ecb.europa.eu/press/pr/wfs/2015/html/index.en.html)

 

Yours sincerely,

 

 

Valérie Saintot

Head of Division
Outreach

Directorate General Communications

EUOPEAN CENTRAL BANK
Tel:  +49 69 1344 1300

E-mail: [11][email address]

[12]http://www.ecb.europa.eu

[13]http://www.youtube.com/ecbeuro
[14]https://twitter.com/ecb

 

Any e-mail message from the European Central Bank (ECB) is sent in good
faith, but shall neither be binding nor construed as constituting a
commitment by the ECB except where provided for in a written agreement.
This e-mail is intended only for the use of the recipient(s) named above.
Any unauthorised disclosure, use or dissemination, either in whole or in
part, is prohibited. If you have received this e-mail in error, please
notify the sender immediately via e-mail and delete this e-mail from your
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References

Visible links
1. https://www.ecb.europa.eu/ecb/legal/pdf/...
2. http://www.ecb.europa.eu/press/pr/date/2...
3. http://www.ecb.europa.eu/press/pr/date/2...
4. http://www.ecb.europa.eu/mopo/pdf/150202...
5. http://www.ecb.europa.eu/ecb/legal/pdf/o...
6. http://www.ecb.europa.eu/ecb/legal/pdf/o...
7. https://www.ecb.europa.eu/ecb/legal/pdf/...
8. http://www.ecb.europa.eu/ecb/legal/pdf/o...
9. http://www.ecb.europa.eu/mopo/liq/html/i...
10. http://www.ecb.europa.eu/press/pr/wfs/20...
11. http://[email address]/
12. http://www.ecb.europa.eu/
13. http://www.youtube.com/ecbeuro
14. https://twitter.com/ecb

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From: Ranjan Kumaran

Delivered

Dear ECB Information,

Thank you for clarifying one aspect of the ECB ABS and Covered Bond Purchase Programme. It is still unclear as to whether the ECB has printed money to buy up exposure to UK public sector debt via Euro denominated Covered Bonds backed up by GBP issued UK PFI and Municipal lending.

Until the ECB provides a list of the Public Sector projects and loans that contribute to its Covered Bond portfolio, the public wil never know for sure whether the ECB have used QE to profit from public services during a time of austerity.

Yours sincerely,

Ranjan Kumaran

Link to this

European Central Bank

Dear Sir or Madam,

This is to acknowledge receipt of your e-mail. We will look into the matter raised and respond as appropriate.

Yours faithfully,

Directorate General Communications
EUROPEAN CENTRAL BANK
Tel: +49 69 1344 1300
E-mail: [email address]
http://www.ecb.europa.eu
https://www.bankingsupervision.europa.eu
http://www.youtube.com/ecbeuro
https://twitter.com/ecb

Link to this

From: ECB Information
European Central Bank

Dear Mr Kumaran,

 

Further to your e-mail of 2 April 2015, and as indicated in earlier
communications, issuers of the ABSs eligible for the ABSPP must be
established in the euro area (see Article 2 of [1]Decision ECB/2014/45).

 

Article 2 of the [2]Decision ECB/2014/40 on the third covered bond
purchase programme (CBPP3) does not make it possible to have a euro
denominated covered bond backed by GBP issued by a UK public sector entity
(PFI or municipal lending entity). The Article explicitly stipulates that
the issuer of eligible covered bonds has to be incorporated in the euro
area and the issuer has to be a credit institution and not a public sector
entity. Covered bonds shall be denominated in euro, held and settled in
the euro area.

 

Kind regards,

 

Valérie Saintot

Head of Division
Outreach

Directorate General Communications

EUOPEAN CENTRAL BANK
Tel:  +49 69 1344 1300

E-mail: [3][email address]

[4]http://www.ecb.europa.eu

[5]http://www.youtube.com/ecbeuro
[6]https://twitter.com/ecb

 

 

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Link to this

From: Ranjan Kumaran

Delivered

Dear Ms Saintot,

Congratulations on your recent promotion.

Thank you for your recent attempt to answer my question about ECB exposure to UK public sector borrowing.

UK Local Authorities and PFI projects have hundreds of millions of pounds of debt to (non-UK) European Banks.

The UK Local Authority Loans are called Lender Option Borrower Option Loans (LOBOs). They are swaptions which contain embedded swaps. These are derivatives which are also known as Bermudan or multi-callable swaps.

The Loans that European Banks have made to UK Local Authorities and PFI infrastructure projects have been made in Great British Pounds and the Covered Bonds to whose pools they contribute collateral have all been issued in Euros.

Are Euro-denominated Covered Bonds which are in part backed up by UK collateral therefore all entirely ineligible for the ECB Covered Bond Purchase Programme?

Yes or No?

La Caisse Francaise de Financement Local has issued a programme of Covered Bonds in Euros whose pool includes loans to Dexia Credit Local which have in turn been backed by loans to UK entities, but are accounted for as 100% French exposure.

Read page 7: http://caissefrancaisedefinancementlocal...

This kind of accounting allows the ECB to hold Euro denominated Public Sector Covered Bonds with UK Public Sector collateral whilst claiming the collateral is sourced from the Euro Area.

Due to this ambiguity, can you confirm whether or not La Caisse Francaise de Financement Local's Public Sector Bond issues are therefore ineligible for the ECB's Covered Bond Purchase Programme?

Would Irish Bank Depfa's Euro-denominated Public Sector Covered Bonds which are constituted, in part, of loans to UK Local Authorities, therefore also be ineligible under the ECB's Covered Bond Purchase Programme?

Given the political nature of the ECB and its reluctance to be transparent about which Covered Bonds it currently owns or is allowed to own, and bearing in mind the fact that the market is now completely distorted due to ECB interventions, it is becoming increasingly challenging to assess the quality of ECB reassurances.

When will the ECB reveal the identity of the Covered Bonds the ECB hold and of their underlying collateral?

And is there a document which states how long the ECB can legally continue to prevent the public from knowing the truth?

If so, please could you release it?

Yours sincerely,

Ranjan Kumaran

Link to this

European Central Bank

Dear Sir or Madam,

This is to acknowledge receipt of your e-mail. We will look into the matter raised and respond as appropriate.

Yours faithfully,

Directorate General Communications
EUROPEAN CENTRAL BANK
Tel: +49 69 1344 1300
E-mail: [email address]
http://www.ecb.europa.eu
https://www.bankingsupervision.europa.eu
http://www.youtube.com/ecbeuro
https://twitter.com/ecb

Link to this

From: ECB Information
European Central Bank

Dear Mr Kumaran,

 

Further to your e-mail of 13 April 2015, we would like to clarify that,
according to ECB’s eligibility rules for the CBPP3 (with the exception of
Multicédulas), the underlying covered bond pools must conform with EU
legislation and more specifically with the Capital Requirements Directive
(Part 1, points 68 to 70 of Annex VI to Directive 2006/48/EC) or, as of 1
May 2015, with the Capital Requirements Regulation (Article 129(1) to (3)
and (6) of Regulation (EU) No 575/2013).

 

Moreover, besides EU legislation, specific national covered bond
legislation applies that can also include additional restrictions on the
type of loans foreseen to be included in the underlying covered bond
pools. The provisions included in these legal acts are deemed sufficient
by the Eurosystem. Regarding the specific loans included in the underlying
cover bond pools, the Eurosystem currently does not require loan-by-loan
information.

 

Finally, we would like to clarify that the individual ISIN information
that you request is not public and recall that information on individual
securities purchased under the covered bond purchase programme CBPP3 is
not disclosed for the reasons explained in detail in the ECB’s replies to
your earlier enquiries.

 

 

Yours sincerely,

 

 

Valérie Saintot

Head of Division
Outreach

 

Directorate General Communications

EUOPEAN CENTRAL BANK
Tel:  +49 69 1344 1300

E-mail: [1][email address]

[2]http://www.ecb.europa.eu

[3]http://www.youtube.com/ecbeuro
[4]https://twitter.com/ecb

 

 

show quoted sections

Link to this

From: Ranjan Kumaran

Delivered

Dear Valerie Santot,

According to your message, I understand that the ECB are both refusing to disclose the identities of the Covered Bonds it has purchased, and also refusing to identify which Eurozone and UK local authorities and municipal infrastructure projects are now paying off loans in order to finance the profits that the ECB earns thanks to its recent and growing Covered Bond Portfolio.

This is unethical and deceptive on multiple levels.
It's an abuse of power and a conspiracy against the UK and European public.

Just as the German Constitutional Court took the ECB to the European Court of Justice to prevent ECB purchase of Sovereign Debt, the ECB ought to answer questions about the manner in which it is printing money to distort the Covered Bond market by buying up the EU and UK's municipal debt and other infrastructure investment exposures.

The ECB should not be printing money to become a massive creditor to Municipals and Local Authorities.

This looks to me to be a pre-emptive backdoor bailout of the failing Banking Sector. An accounting trick being used to circumvent rules which were designed to prevent such market abuse.

Please be transparent about the Covered Bond Portfolio. What steps have been taken to ensure that DEPFA / PBB hasn't issued Covered Bonds that have been bought up by the ECB and which contain UK LOBO loans (to UK local authorities) as collateral? I have so far seen no meaningful assurance from the ECB whatsoever. The assurances you've given so far are so weak as to be meaningless.

Mario Draghi said in Naples in 2012 that he would do whatever it takes to save the Euro. It would appear that this includes performing fraud and deception on the citizens of the EU by printing Euros in order to feather the ECB's own nest.

Yours sincerely,

Ranjan Kumaran

Link to this

European Central Bank

Dear Sir or Madam,

This is to acknowledge receipt of your e-mail. We will look into the matter raised and respond as appropriate.

Yours faithfully,

Directorate General Communications
EUROPEAN CENTRAL BANK
Tel: +49 69 1344 1300
E-mail: [email address]
http://www.ecb.europa.eu
https://www.bankingsupervision.europa.eu
http://www.youtube.com/ecbeuro
https://twitter.com/ecb

Link to this

From: ECB Information
European Central Bank

Dear Mr Kumaran,

 

We would like to acknowledge receipt of your e-mail of 18 August 2015 and
have taken note of your feedback.

 

Following our earlier correspondence, we would like to recall that
information on the covered bond purchase programme CBPP3 can be found on
the ECB’s website (please see
[1]www.ecb.europa.eu/mopo/implement/omo/html/index.en.html and
[2]www.ecb.europa.eu/mopo/implement/omt/html/index.en.html) and that
details about individual securities purchased under the programme are not
disclosed for the reasons explained in detail in the ECB’s replies to your
previous enquiries, including in the ECB’s response dated 30 January 2015
to your public access request.

 

Yours sincerely,

 

 

Valérie Saintot

Head of Division
Outreach

Directorate General Communications

EUOPEAN CENTRAL BANK
Tel:  +49 69 1344 1300

E-mail: [3][email address]

[4]http://www.ecb.europa.eu

[5]http://www.youtube.com/ecbeuro
[6]https://twitter.com/ecb

 

 

show quoted sections

Link to this

From: ECB Information
European Central Bank

Dear Mr Kumaran,

 

We would like to acknowledge receipt of your requests of 4 November 2015
to receive information on “what percentage of the covered bonds bought by
ECB in 2014 and 2015 have been issued by banks (i) whose headquarters are
in Germany and (ii) that are based in Ireland”.

 

For the reasons explained in the ECB’s response of 30 January 2015 to your
public access request, detailed and disaggregated information on the
above-mentioned purchases cannot be provided. As you may recall from
earlier correspondence, aggregated quantitative information on the ECB’s
active programmes can be found on the ECB’s website (see
[1]www.ecb.europa.eu/mopo/implement/omt/html/index.en.html) and in the
ECB’s weekly financial statement (see
[2]www.ecb.europa.eu/press/pr/wfs/2015/html/index.en.html)

 

Yours sincerely,

 

 

Valérie Saintot

Deputy Head of Division
Outreach

Directorate General Communications

EUROPEAN CENTRAL BANK
Tel:  +49 69 1344 1300

E-mail: [3][email address]
[4]http://www.ecb.europa.eu

[5]http://www.youtube.com/ecbeuro
[6]https://twitter.com/ecb

 

 

show quoted sections

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