As market conditions normalise, banks will need to make efforts to overcome the present large-scale use of self-originated ABS as collateral in Eurosystem credit operations, and instead place these securities with investors. This requires efforts to meet investor standards, in particular by improving the transparency, simplicity and the degree of standardisation of transactions.
The Eurosystem is prepared to contribute as far as it can to the reactivation of the ABS markets. The eligibility criteria and risk control measures of the Eurosystem’s collateral framework are an important tool in this respect. Reactivating ABS markets would be, first of all, in the interest of banks as it would restore a major source of funding.