ECB might lend banks covered bonds, sources say

03/4/2010 | Bloomberg

Policymakers at the European Central Bank will discuss the idea of lending covered bonds back to banks to help with their access to funds, sources said. "If the ECB were to do this and it would lead to more high-quality collateral being freed up, it could certainly help the banks and the money markets," said Julian Callow, chief European economist at Barclays Capital. "The worst that can happen is that no one will want to borrow the assets."

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