LONDON, March 28 The Bank of England may act to
revive the securitised debt market, a policymaker said on
Friday, the latest sign that products which triggered the worst
financial crisis in a generation are coming in out of the cold.
Clara Furse, a member of the British central bank's
Financial Policy Committee, said small firms are finding it hard
to get loans from banks focused on meeting tougher capital
requirements following the 2007-09 financial crisis.
The FPC monitors risks in the broader financial system.
Expanding market-based finance, such as raising money by
issuing securitised debt, would broaden available funding for
companies and help the economic recovery, Furse said in her
first speech since becoming an FPC member a year ago.
The committee will assess and, where necessary act to
promote a better functioning market for securitisation in
Britain, a sector that bundles loans into a bond, she said.
Securitised debt has shrunk after a corner of the market
based on subprime U.S. home loans became untradable in 2007,
sparking a global meltdown in markets and a banking crisis.
Reviving the sector is seen as core to weaning the European
economy off its reliance on banks to fund the economy.
"Non-bank and market-based finance widen participation and
enhance diversity in the financial system," Furse said in a
speech in Liverpool and made available to the media.
(Reporting by Huw Jones; Editing by Catherine Evans)