ECB says stepping up preparations to buy ABS

FRANKFURT Thu Jun 5, 2014 3:35pm EDT

FRANKFURT (Reuters) - The European Central Bank said on Thursday it would intensify its preparations to buy asset-backed securities (ABS), to help stimulate Europe's market for the assets and boost the flow of credit to smaller businesses.

ECB President Mario Draghi told a news conference the bank would consider purchasing "simple and transparent asset-backed securities with underlying assets consisting of claims against the euro area non-financial private sector".

He said the move would take into account "desirable changes in the regulatory environment", on which the euro zone central bank "will work with other relevant institutions".

Later, he said the Governing Council had not discussed the scope of any ABS program at its meeting on Thursday.

The ECB and the Bank of England want European banks and investors to agree common standards for safer ABS, which could help foster growth by providing credit to firms that are too small to raise investment funds direct from capital markets.

Europe's ABS market has not recovered from the stigma created by the global financial crisis, which was triggered by doubts about the quality of assets in supposedly rock-solid U.S. mortgage-backed securities.

(Writing by Paul Carrel; Editing by Catherine Evans)

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