ECB says could offer leniency in ABS loan reporting
FRANKFURT, Sept 9
FRANKFURT, Sept 9 (Reuters) - The European Central Bank said on Monday it could accept some debt paper as collateral against which it lends money to commercial banks, even if they do not fulfil the new reporting requirements.
The move, which concerns residential mortgage-backed securities (RMBS) and small- and medium-sized enterprise (SME) asset-backed securities (ABS), offers some exceptions to the ECB's loan-level reporting requirements, which was designed to increase transparency for the hard-to-value assets.
"As of Oct. 16, 2013, the Eurosystem may temporarily accept non-compliant RMBSs and SME ABSs as eligible collateral, on a case-by-case basis and subject to the provision of adequate explanations for the failure to achieve the mandatory score," the ECB said in a statement.
Without the exception, non-compliant paper will be ineligible as collateral, the ECB added.
During the financial crisis, the ECB has taken several steps to ease its rules governing collateral to alleviate the plight of banks suffering from a lack of funding and help especially small firms obtain funds.
The central bank wants to support new funding sources, including asset-backed securities comprising of small-business loans. (Reporting by Sakari Suoninen and Eva Taylor)
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