ECB may need to refine collateral policy: Paramo

A member of the European Central Bank's (ECB) governing board has said the institution should consider revising the range of collateral it accepts in its open market operations.

Commentators have argued that the eurozone's banks have abused the ECB's acceptance of a relatively broad range of collateral during the credit crunch to swap riskier forms of collateral for central banks funds. Some have voiced concerns that banks have created riskier assets solely to swap these in ECB operations.

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