The European Central Bank (ECB) has relaxed its collateral requirements for repo eligibility in a bid to create more liquidity for European banks.

As part of its initiative, the ECB reduced the minimum threshold for some ABS to a single-A credit rating from triple-A.

The bank will also allow central banks at the national level within the euro-zone to take bank loans and ABS as collateral. The ECB has also reduced the reserve requirements for its repo operation.

The ECB will also provide two three-year refinance operations, which will replace the previous long-term repo operations  or LTRO. Participating banks will have the option to return the funds after one year.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.