ECB concern over liquidity scheme

The European Central Bank on the 15 May 2008 voiced its 'high concern' at growing evidence that banks are exploiting its efforts to unblock the frozen funding markets by using its liquidity scheme to offload more risky assets than it envisaged. Yves Mersch, a governing council member, said the ECB was now 'looking very hard at whether there is not a specific deterioration of collateral' which the central bank is accepting in return for funds.

ECB: Speech, 15.5.08: Reflections on the current financial market correction http://www.ecb.int/press/key/date/2008/html/sp080515.en.html

ECB: Monetary policy http://www.ecb.int/mopo/html/index.en.html

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