VARIATION MARGIN


Meaning of VARIATION MARGIN in English

The Eurosystem requires a certain level of the market value of the underlying assets used in its liquidity-providing reverse transactions to be maintained over time. This implies that if the value, measured on a regular basis, of the underlying assets falls below a certain level, the national central bank will require the counterparty to supply additional assets or cash (i.e. a margin call). Similarly, if the value of the underlying assets, following their revaluation, exceeds a certain level, the counterparty may retrieve the excess assets or cash.

See also:

European Central Bank English Glossary.      Английский глоссарий Европейского Центрального Банка.