Funding worry for banks as ECB hikes eligibility criteria for repo facility


New eligibility criteria could force banks to restructure or even dispose of assets they have pledged as collateral to access the European Central Bank’s Eurosystem credit operations facility.

From March 1 this year, asset-backed securities (ABS) will require triple-A ratings from two rating agencies rather than one to qualify for the ECB’s repo facility. Furthermore, this will take retrospective effect from March 1, 2011, with the two-rating requirement applying to all deals funded through the f

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