September 25, 2017 / 9:39 AM / a year ago

ECB's collateral rules could be tightened as demand falls - Mersch

FRANKFURT (Reuters) - The European Central Bank could tighten its rules on accepting collateral from banks in return for loans as demand for cash declines, ECB Executive Board member Yves Mersch said on Monday.

FILE PHOTO: Yves Mersch, Member of the Executive Board of the European Central Bank at the headquarters of the European Central Bank (ECB) in Frankfurt, January 13, 2014. REUTERS/Ralph Orlowski

“While the temporary collateral framework has successfully eased potential collateral shortages, it could be argued that it should not become part of the regular framework,” Mersch, a hawk, said at a conference in Lisbon.

He added the ECB can already start thinking about adapting its risk-management framework to “a more conventional environment for the conduct of monetary policy”.

Reporting By Francesco Canepa; Editing by Balazs Koranyi

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