ECB might support idea of buying ABS

FXstreet.com (Barcelona) - A report from the German die Welt suggests a majority at the governing council in the European Central Bank might be supporting the idea of buying ABS or 'asset-backed-securities' to help the flow of credit to the periphery.

Sebastien Galy, currency strategist at Societe Generale, notes: "As of now the ECB is only in the technical process of helping to integrate a deeply fragmented market amongst multiple jurisdictions."

From die Welt: "Companies in Spain or Italy are struggling to get funding from the banks. The ECB wants to change that by bringing the market for securitized loans back on track, so-called "asset-backed securities" (ABS). According to information from central bank circles, such a move is quite possible, they say; in the eyes of critics, however, this would violate the ECB mandate."

Opposing possible purchases of ABS, the Bundesbank will surely express its concerns since minute one.