BARCELONA (Reuters) - The European Central Bank may buy "simple and transparent" asset-backed securities (ABS) to help achieve its target of delivering price stability to the euro zone, ECB Executive Board member Yves Mersch said on Wednesday.
In a speech entitled "Next steps for European securitisation markets", Mersch said the ECB wanted a more holistic approach to the regulatory treatment of ABS in Europe and greater transparency of their treatment by ratings agencies.
"There is a growing consensus that an instrument once seen as part of the problem could in fact be part of the solution," he said of talks about ABS in European policymaking circles.
The ECB included the possibility of ABS purchases in a package of measures it announced last Thursday to pump money into the sluggish euro zone economy. [ID:nL6N0OM3BH] [ID:nL6N0OG24Z]
"Substantial efforts are underway to further improve the transparency and disclosure requirements of ABS in a pan-EU manner," he said.
Mersch said greater standardisation of ABS products is key to stimulating greater activity in the market, and suggested streamlining reporting requirements or providing standardised ABS prospectus templates.
He also called for ratings agencies to provide more transparency on how they derive ratings for ABS products.
(Reporting by Paul Day; Writing by Paul Carrel)