BERLIN, June 24 Germany should revive the
asset-backed securities market, which fell into disrepute during
the global financial crisis, to help small businesses, a senior
member of German Chancellor Angela Merkel's conservatives said
Europe's market for asset-backed securities still carries
the stigma created by the crisis, which was triggered by doubts
about the quality of assets in U.S. mortgage-backed securities.
But the European Central Bank and the Bank of England last month
set out proposals to resurrect the market to help the flow of
money to business.
"We need to look for alternative financial instruments for
the Mittelstand," Ralph Brinkhaus, conservative deputy
parliamentary floor leader, said, referring to the small and
medium-sized firms that form the backbone of the German economy.
"Securitisation could be a good solution to that," he told
Reuters, referring to asset-backed securities, which are
basically bundles of bonds and loans.
Small businesses around Europe have found it tough to get
financing from banks which are still recovering from the after
effects of the financial crisis.
Brinkhaus said the aim was not to deregulate the market but
rather to ensure a high-grade and transparent product.
"We need to restore trust in this product through quality,"
Brinkhaus said, though he did not elaborate on what concrete
measures politicians would take.
"The ball is now in the financial industry and the
Mittelstand's court; it's up to them to make proposals on how
current regulatory framework can be improved for loan
On Monday, Germany's BdB banking association and the BDI
industry association called for a revival of the asset-backed
market, saying it could help to solve the credit crunch in
crisis-stricken southern European countries.
(Reporting by Matthias Sobolewski; Writing by Michelle Martin.
Editing by Jane Merriman)