FRANKFURT (Reuters) - The European Central Bank said on Thursday it had patched up a dispute over its purchases of securitized debt, a key part of its stimulus plan, by letting national central banks in on the buying of the assets.
The ECB said it will soon start buying asset-backed securities on top of covered bonds, with which it aims to pump more money into the banking system to entice lending and support the recovery.
In order to start buying these complicated assets, it sought help from four asset managers to do the purchases. But that raised criticism from the Banque de France, France’s central bank, which reckons big national central banks are capable of intervening in the market themselves.
“Frankly, it is with satisfaction that I can say it’s over,” said ECB President Mario Draghi when he was asked during the post-meeting news conference about the dispute with the French central bank.
“We found a very reasonable way to proceed,” Draghi added.
Draghi said the ECB was not ruling out national central banks taking part in the buying of ABS and is now assessing which ones are ready and willing to participate.
“There is a good faith commitment on both sides in changing the governance structure in time to have to have also the Banque de France on board.”
There was no obstacle to including any other national central bank, Draghi added, reiterating that all possible losses or profits from the program would be shared across the central banks in the Eurosystem.
Reporting by Eva Taylor