ECB announces a reduction of the haircuts for certain ABS in its collateral rules

Today, July 18th, the ECB has announced some changes to the haircuts imposed on various instruments used as repo collateral.  In particular, it has reduced the rating requirements for six classes of asset-backed securities and reduced haircuts generally applicable to eligible ABS under the Eurosystem collateral framework.  This move appears to reflect the views expressed at the highest levels of the ECB that many securitisations performed extremely well and that one should treat high quality securitisations differently from the flawed products that caused damage during the crisis.  The ECB press release may be found here.