Updating the discount window's Web site, the Federal Reserve Bank of New York clarified that it is willing to accept investment grade asset-backed commercial paper as collateral.
The bank's position is spelled out in a
The specific question is: "May a depository institution pledge asset-backed commercial paper?"
The New York Fed's answer: "Reserve Banks accept investment-quality commercial paper. Asset-backed commercial paper is viewed as a particular type of commercial paper and thus is eligible for consideration. Reserve Bank discount window staff may request information on the structure and/or the quality of the underlying assets in order to assign appropriate lendable value."
On Friday, a NewYork Fed spokesman said the update was done "In response to specific inquiries" from banks.
