Brian Lenihan Jnr (Dublin West, Fianna Fail)

In the course of the financial crisis, credit institutions have made active use of the Eurosystem's re-financing operations and have deposited as collateral some eligible assets for which market liquidity had basically dried up. The eligibility criteria and risk control measures of the Eurosystem's collateral framework are an important tool in the reactivation of the asset-backed securities markets. The risk control measures employed by the ECB include the prohibition of some types of close links, the raising of the rating threshold for asset-backed securities, an increase in valuation haircuts and the phasing out of multi-layer securitisations. It is untrue therefore that the ECB is open to accepting all assets within a class regardless of their quality. On the contrary, the ECB actively grooms assets presented to it and it could be said that it is already seeking higher grade assets than were the norm on the markets that have dried up.

That said, in regard to NAMA bonds specifically, I am not aware of any particular difficulty that has been raised at the ECB.

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