FRANKFURT, April 25 (Reuters) - The European Central Bank could be part of a push for wider use of asset-backed securities (ABS) to ease credit availability for smaller firms, European Central Bank Executive Board member Yves Mersch said on Thursday.
Mersch, in a guest column in the Financial Times, also wrote that governments have to be in the driving seat in reforming the euro zone economy, not the ECB.
He said that to ease credit availability, a new asset class of securitised small business loans could be created, and the ECB could play a role in this.
“Funding aid for sound pools of small business loans could be provided by development banks on the national and European level, possibly supported by liquidity from the ECB within its mandate.”
ECB policymakers have been worried about lack of access to bank loans by small firms, especially in southern European countries mired in the debt crisis, and ECB President Mario Draghi has said the bank is looking at various options.
Mersch also warned against expecting too much from the ECB, saying governments are in charge of economic reform.
“Calls are becoming louder for the ECB to introduce new tools, swallow ever more risk and start economic fine-tuning,” Mersch said.
“But this would be a diversion. The successful measures taken by the ECB are there to buy time for the political authorities to fix the governance framework and implement reforms.”
Reporting by Sakari Suoninen; editing by Stephen Nisbet