FRANKFURT, Sept 9 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
(Reporting by Sakari Suoninen and Eva Taylor)