ECB's stricter loan standards for banks raise concerns

09/8/2008 | Wall Street Journal, The

Early next year, the European Central Bank's standards on loans made to financial institutions will include a 12% "haircut" on asset-backed securities used as collateral against the money borrowed. Officials at the central bank became concerned about the level of risk that the ECB assumed by accepting certain securities. The move is an effort to reduce those risks, but it has raised concerns about bank liquidity.

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