December 22, 2016 / 11:36 AM / 2 years ago

ESRB to poll markets about bond backed by sovereign debt

FRANKFURT, Dec 22 (Reuters) - The European Systemic Risk Board is set to survey market participants about the creation of a pan-European bond backed by countries’ sovereign debt, it said on Thursday.

The survey will be launched by the end of December and run until Jan. 27, the ESRB, a financial risk watchdog which brings together the European Union’s central banks, said.

An ESRB task-force, chaired by Irish governor Philip Lane, been looking into the creation of a security based on sovereign debt from multiple EU countries, which would address banks’ and investment funds’ need for high-quality collateral to use for borrowing cash.

It is seen as an alternative to a long-debated common euro zone bond which has been resisted by the bloc’s economic powerhouse Germany. (Reporting By Francesco Canepa; Editing by Toby Chopra)

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