ECB: Loophole to RMBS/SME ABS Loan Reporting

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The European Central Bank said on Monday that some residential mortgage-backed securities and ABSs backed by loans to small and medium-sized enterprises not meeting its new loan-level reporting requirements could still be eligible for repo funding.

The ECB has also extended the implementation deadline on the new loan-level reporting requirements. By Oct.16, RMBS and SME ABS that have not reached the mandatory level of compliance will become ineligible for use as central bank collateral, the ECB said on Monday.

The timeline for implementing the new loan level data requirements was first announced in November 2012.  The ECB originally sought to have data requirements for RMBS become mandatory from on Oct. 9, 2013.   

The changes will facilitate a smoother transition to full compliance while ensuring a level playing field between RMBSs and SME ABSs at different stages of the compliance process.

One bank analyst said that because the changes are not that severe, the impact is fairly minimal.  “Plans would already have been put in place by many participants,” said the bank analyst.



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