Comments on: Unconventional monetary policies: thinking of exit strategies http://www.ivosokolov.com/2009/11/unconventional-monetary-policies-thinking-of-exit-strategies/ Ivo Sokolov's Blog on Economics, Business, Politics and IT Wed, 27 Jan 2010 15:25:49 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Ivo Sokolov http://www.ivosokolov.com/2009/11/unconventional-monetary-policies-thinking-of-exit-strategies/comment-page-1/#comment-8 Ivo Sokolov Mon, 23 Nov 2009 09:17:35 +0000 http://www.ivosokolov.com/?p=70#comment-8 It turns out that last Friday the ECB actually amended the eligibility requirements for asset-backed securities in Eurosystem credit operations. I just got the email with the press release. Just in line with what I had assumed, they will require ratings from 2 rating agencies and also the second-best rating will have to comply for new ABS issued from Mar 1st 2010 on. By 2011 all those rules will be applied to all ABS, regardless of date of issue. The ECB apparently aims at pulling back some liquidity, but also arguments the eligibility tightening as an attempt to restore the functioning of the ABS market. What this also means is that everyone will have to restructure their existing deals to be ECB repo eligible. And some additional business for the rating agencies. It turns out that last Friday the ECB actually amended the eligibility requirements for asset-backed securities in Eurosystem credit operations. I just got the email with the press release.

Just in line with what I had assumed, they will require ratings from 2 rating agencies and also the second-best rating will have to comply for new ABS issued from Mar 1st 2010 on.

By 2011 all those rules will be applied to all ABS, regardless of date of issue.
The ECB apparently aims at pulling back some liquidity, but also arguments the eligibility tightening as an attempt to restore the functioning of the ABS market.

What this also means is that everyone will have to restructure their existing deals to be ECB repo eligible. And some additional business for the rating agencies.

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