ECB Board Member: Central Bank Should Tighten Banks' Access To Its Cash
The ECB is expected to announce that its 2.55 trillion-euro ($3.0 trillion) bond-buying program would end this year. While some economists argue that a decision is coming at the June 14 meeting, others expect the ECB to provide a timeline on when it will conclude its asset purchases program.
So that, the markets await that the ECB would raise interest rates in 2019, the first increase in eight years. Yves Mersch (ECB board member) stated, that rules allowing national central banks to accept bank loans as collateral would need to be scrapped or made the same for the whole of the Eurozone.
According to the politician, lax rules on what collateral banks can use to borrow from the ECB, introduced during the 2010-12 Eurozone crisis, should be strengthened and some criteria regulating bond purchases also need changing. Permission for banks to borrow against some asset-backed securities, such as government-guaranteed bundles of loans, should also be reviewed, Mersch added.