ECB defends securitisation of SME loans: ECB has spoken on promoting securitisation to improve banks' financing of SMEs. It discussed the measures put in place since the 2007 US sub-prime crisis, not least the Eurosystem's loan-by-loan reporting requirements and collateral eligibility criteria, and stressed the low incidence of default in European asset-backed securities. ECB finds that the international securitisation capital framework does not reflect improved standards and regulation.  It also finds odd that certain covered bonds can receive preferential capital treatment despite being subject to less stringent standards than those applying to "high-quality securitisations", and that insurers could be required to hold more capital for a securitisation than if they were holding the capital pool directly. ECB calls for coherence and a level playing field across financial sectors. This would involve using central bank eligibility criteria to identify "high-quality securitisations", and assigning those securitisations preferential risk weights. (Source: Banks, SMEs and Securitisation)