View Full Version : Mersch Says ECB Will Unveil Collateral Changes Soon

08-23-2008, 07:42 PM
By John Fraher
Aug. 23 (Bloomberg) -- European Central Bank council member Yves Mersch (http://search.bloomberg.com/search?q=Yves+Mersch&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said the ECB will announce changes to its money- market rules in coming weeks to head off the risk of abuse by some financial institutions.
``At the margins there can still be cases where you see dangers of gaming the system,'' Mersch said in an interview today in Jackson Hole, Wyoming. ``The governing council has been discussing the whole issue'' and has agreed on a ``certain amount'' of refinement to the existing rules, he said.

ECB officials have become more concerned in recent months that banks are taking advantage of collateral rules that are broader than those used by the Federal Reserve and the Bank of England. The danger is that banks struggling to sell securities damaged by the credit-market rout will dump them on the ECB and become overly reliant on central bank funds.....