ECB to Start Requiring Loan-by-Loan Data on ABS By Year-End

The European Central Bank will start requiring lenders to provide data on the loans in asset-backed securities used as collateral for funding by the end of this year.

The data requirement will initially cover loans in residential mortgage-backed securities, pending the approval of the ECB’s governing council, said Fernando Gonzalez, the bank’s head of strategy, who was speaking at the 2012 IMN/AFME Global ABS conference in Brussels.

Loan-level reporting for commercial mortgage-backed securities and bonds backed by financing to small and medium- sized businesses will start in 2013, he said. Loan reporting for other classes of securities such as bonds backed by car loans will start in 2014.

The Frankfurt-based central bank is seeking to improve the quality of the assets it takes on as loan security while improving confidence among investors. Banks create ABS by pooling the proceeds of consumer and property loans, typically allowing them to raise money more cheaply than by issuing unsecured debt.

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