ECB tweaks collateral requirements

The European Central Bank (ECB) on Thursday acted on fears banks were taking advantage of its collateral rules by applying a haircut of 12% to asset-backed securities.

The move raises the haircuts for most, though not all types of asset-backed securities, which were previously subject to haircuts of between 2% and 18% based on their residual maturity and coupon structure.

On top of the basic 12% charge, the ECB will levy an addition 5% valuation markdown on asset-backed securities with a

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