ECB buying helps biggest banks to delever

ECB sign 230x150
By Owen Sanderson
28 Nov 2019

The resumption of European Central Bank purchases in the ABS market has helped some of the largest banks in Europe to issue dual purpose securitizations, locking in cheap funding from the senior tranche and selling down the structure to achieve risk transfer. ABS buying is now forming a greater part of the central bank’s asset purchases than during previous easing rounds.

Since the ECB restarted its asset purchasing programme, the euro-denominated ABS market has become more competitive, with senior tranches tightening discount margins back to record levels, and following Euribor deep into negative-yielding territory.

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