FRANKFURT (MNI} – The European Central Bank will keep the minimum
credit threshold for marketable and non-marketable assets in the
Eurosystem collateral framework at investment-grade level (BBB-) beyond
the end of 2010, except in the case of asset-backed securities (ABS),
President Jean-Claude Trichet confirmed Thursday.
“In addition, the Governing Council has decided to apply, as of 1
January 2011, a schedule of graduated valuation haircuts to the assets
rated in the BBB+ to BBB- range,” Trichet said during his introductory
statement at today’s press conference.
The changes will replace the ECB’s current single add-on haircut of
5% for ratings below A-, Trichet said.
He later said that the new system will mean no change on paper
rated above BBB, meaning that the first haircut — at BBB+ level — will
match the current 5% add-on.
“The detailed haircut schedule will be based on a number of
parameters which are specified in the press release to be published
after today’s press conference,” the president said.
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–Frankfurt Bureau tel.: +49-69-720 142, email: frankfurt@marketnews.com
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