ECB's Mersch signals ABS treated inappropriately by present EU regulations

FXStreet (Łódź) - ECB Executive Board member Yves Mersch, who spoke on Monday at a Deutsche Börse event in London, suggested that regulations on some of the European asset backed securities were too rigid and should be revised as soon as possible.

If the regulators fail to act soon on small business ABS treatment, investors will move their money elsewhere, Mersh stressed, adding that a joint statement from the ECB and the BoE would show EU's determination to “decisively move forward.”

“The potential for SME ABSs to provide some funding relief for SMEs is limited in part by the current proposals to overhaul the securitisation credit risk framework, and is also limited by level playing field issues within EU regulations and proposals,” Mersch said. “It is not too late to change course: not all EU securitisations deserve the stigma attached to them for the past few years.”