Bank funding blow from ECB repo withdrawal
As the European Central Bank winds down its repo facility, there are fears that traditional avenues of securitisation issuance are still not viable.
With €1.3 trillion of retained securitisation hanging over the European market, credit analysts fear weaker Eurozone banking systems could face considerable rollover risk when the European Central Bank’s repo facility winds down its extraordinary liquidity provisions.
The ECB is gradually tightening the requirements for using the repo facility. On July 28, the central bank announced that as of January 1, 2011, the 5% flat rate discount levied on assets rated between BBB- and BBB+ will be
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