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EU Bank Liquidity, City Vacancies, Sebi Rule: Compliance 

May 14, 2014
Carla Main, Bloomberg

The European Union is considering letting banks deploy a wider range of asset-backed debt than permitted by international rules to meet liquidity requirements, as policy makers hunt for ways to boost lending.

The EU’s regulatory arm may propose that securitizations of loans to small businesses and consumers including car buyers should count toward the standard, according to a European Commission document obtained by Bloomberg News.

The securities would have to be of “high quality” to count, ruling out those generated from “loans to credit-impaired borrowers,” according to the document. And banks wouldn’t be allowed to count securities based on loans they or their affiliates had made.

The commission plans concern how to implement an international rule published in 2013 by the Basel Committee on Banking Supervision. The measure requires banks to have enough easy-to-sell assets to survive a 30-day funding squeeze and is set to begin phasing in next year.

Read more: Bloomberg

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