FRANKFURT May 11 The use and re-use of the same
assets as collateral to borrow cash, financial markets' main
money-spinner, needs to be better regulated to reduce the risk
of a new credit bubble, the vice president of the European
Central Bank said on Thursday.
"One area that still lacks reform concerns re-hypothecation
and re-use of collateral," Vitor Constancio told an ECB
"...There is a push to exclude repos from the leverage ratio
calculation under way that not only weakens the standard but
also eliminates the only brake to banks’ capacity to the
unconstrained creation of inside liquidity."
(Reporting By Francesco Canepa; editing by John Stonestreet)