ECB Expands Securities Lending Inventory Through Collateral Arrangements

In Europe, central bank activity is quietly shaping securities lending flows. The European Central Bank has continued to diversify its securities lending arrangements in 2026, making holdings purchased under programs like the Public Sector Purchase Programme available for lending under standard conditions. Eligible counterparties can borrow these securities against cash or other eligible collateral, often at fixed minimum fees or prevailing market rates depending on the transaction.

This ongoing expansion of central bank-sourced lendable supply matters for stock loan markets because it touches on fundamental liquidity mechanics. Central bank inventories are large, high quality and tradable, and their availability for lending can help underpin short selling and collateral flows in stress scenarios. While the ECB’s framework includes monitoring and recall conditions to prevent misuse, the existence of this inventory as a potential source of lendable stock contributes to resilience in European securities finance.

Source: https://www.ecb.europa.eu/mopo/implement/app/lending/html/pspp-lending-ecb.en.html