In his Monday speech to the Economic and Monetary Affairs Committee of the European Parliament, Mario Draghi gave more details on the ECB’s asset backed securities purchase program (ABSPP). It appears that the ECB will be purchasing senior notes of securitisations that are eligible as collateral under the existing Eurosystem scheme. It is unclear though whether the eligibility criteria will be merely the same as under the existing system or whether, as PCS has advocated, they will be higher thus reflecting the greater risk taken by the ECB as final purchaser. PCS very much sees this program as an opportunity to set new standards for the market as a whole, in line with some of the ideas that have been circulated by various regulatory and policy making bodies concerning “high quality securitisations”.
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