The European Central Bank and the Bank of England on Friday called for easier rules regarding certain securities so as to get credit flowing again in the eurozone economy. In a joint declaration issued at the spring meeting of the International Monetary Fund, the ECB and the BoE complained that the market for securitised loans - widely blamed for causing the financial crisis in single currency area - was impaired and shrinking.
"This is a concern because securitisation, if appropriately structured and regulated, can complement other long-term wholesale funding sources for the real economy, including for small and medium-sized enterprises (SMEs)," the two central banks said. Credit in the euro area has practically dried up for months now, weighing on the very tepid economic recovery in the region.
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