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ECB Eases Funding Access

European Central Bank relaxes its rules on collateral for loans it makes to banks.

By Simone Meier, Bloomberg | Updated on June 22, 2012

The European Central Bank said it will relax some rules on the collateral that banks can offer in exchange for central bank loans.

The ECB has cut the rating thresholds and amended eligibility requirements for some asset-backed securities, the Frankfurt-based central bank said in an e-mailed statement today. Residential mortgage-backed securities and loans to small and medium-sized enterprises rated at least BBB- at Standard & Poor’s will now be accepted with a valuation haircut of 26 percent, it said. The previous minimum rating on such securities was A-.

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