LONDON (Reuters) - Bank of England deputy governor Jon Cunliffe said asset-backed securities in the European Union should be made more transparent to revive a market badly hit by the 2008 financial crisis.
He was speaking after news the European Central Bank and the Bank of England had set out proposals on Friday to resurrect the European Union's market for asset-backed securities (ABS) and help the flow of credit to smaller businesses.
Ensuring the banks that create asset-backed securities, which were at the heart of the global financial crisis, retain some exposure to the underlying assets was an important element of this revival, Cunliffe said in a BBC radio interview broadcast on Monday. (Banks often moved their ABS "off the balance sheet" effectively transferring all risk to investors.)
"The other part is to develop standards so that 'it does what it says on the tin', but it is actually a jar. You want a label on the outside of the jar that is clear, that uses understandable (terms) and ... you can see into the jar," he said.
Cunliffe's interview did not cover monetary policy or the BoE's regulatory responsibilities.
(Reporting by David Milliken; Editing by Eric Meijer)