Funding Archive

Is securitization really material for the ECB?

The share of ABS in the 1.1 trillion ECB asset purchase program is currently only three percent, and may decrease to two percent in 2016. The ECB can easily fulfill its commitment to buy €10bn under covered bond purchase programme and ABSPP with the covered bonds only and is not dependent on the securitization to celebrate the success of the purchase program in September 2016. In last seven months, the ECB acquired the 80 percent of ABS on the secondary market without the support of the new origination. Do you think the securitization is material for ECB to control the inflation

Read More…

Bail-in proposals from Liikanen expert group

Beginning October 2012 the High-level Expert group under leadership of Erkki Liikanen has provided some recommendations to European Commission how to improve the European banking system. The findings of the experts contain some concretizations of Bail-in tool and surely useful to minimize the confusion about the plans of EU to convert senior unsecured creditors into the equity providers of the defaulted banks

Read More…

European data warehouse: loan-by-loan data delivery to ECB

In the nearest future, the issuers of Asset Backed Securities will be obliged to report the loan-by-loan data into European data warehouse, EU centralized database administered by European DataWarehouse GmbH (ED), the ECB-related entity.  If not, the ABS paper will not be accepted as repo collateral. The reporting is done under “ABS Loan Level Initiative”. Initially, the data delivery had to be started end of 2012 for RMBS, and thereafter enrolled for CMBS, SME, leasing and other asset classes. Per today, the initiative is indefinitely delayed. Additionally, it faces the opposition of the EU countries and can lead to legal disputes in banking secrecy law

Read More…

4 requirements for Asset Backed Securities to be accepted for ECB funding

As you know, the banks can get the cheap money from European Central Bank (ECB) by pledging to it the Asset Backed Securities (ABS, = true-sale securitization tranches). What are the eligibility criteria on ABS papers provided to ECB? There are several eligibility criteria’s, but the most relevant are

Read More…