FRANKFURT (Reuters) - The European Central Bank is tightening regulations to prevent banks from pledging some riskier forms of collateral when they borrow from euro zone central banks, it said on Thursday.
“The Eurosystem is excluding investment funds as eligible issuers and guarantors for the collateralisation of Eurosystem credit operations, taking into account their specific risks related to potential asset portfolio changes,” the ECB said.
“The Eurosystem is excluding commercial mortgage-backed securities (CMBSs) from collateral eligibility, owing to their relatively complex nature,” it added.
To see all the changes made by the ECB to its collateral framework, please click:
Reporting By Francesco Canepa; Editing by Gareth Jones