In early June 2014, the Governing Council of the European Central Bank (ECB) announced: (i) a new series of targeted longer-term refinancing operations (TLTROs) aimed at improving bank lending to euro-area households and non-financial businesses, by allowing banks a borrowing allowance of 7% of their total loans to the euro area non-financial private sector (excluding mortgages) until 2018; and (ii) an "intensification of the preparatory work" related to outright purchases of asset-backed securities (ABS), which will involve the ECB considering whether to purchase "simple and transparent" ABS with underlying assets consisting of claims against the euro area non-financial private sector (i.e. including loans to small- and medium-sized enterprises and mortgages), the ECB having "tak[en] into account the desirable changes in the regulatory environment". Further details (and the effective date) of this initiative are to be announced in due course, once the ECB has developed the "modalities" for this policy measure, including the key eligibility requirements for ABS. Whether the ECB's modalities will take into account, or even help to develop, the debate surrounding the development of "high quality securitisation" is as yet unclear.

Useful links

European Central Bank Press Release