ECB Eases Collateral Rules to Alleviate Government Bond Shortage
- Bank doubled amount of cash it will accept to lend out debt
- The decision was ‘overdue,’ says Commerzbank’s Rieger
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The European Central Bank is moving to ease a shortage of government bonds in the euro area that traders say has been exacerbated by its unconventional monetary policies.
In a bid to help meet demand for the securities, the ECB said it doubled the amount of cash it would accept as collateral from banks looking to borrow sovereign debt to 150 billion euros ($170 billion), according to a briefing posted on its website on Monday.