ABS secondary disappointed with lost ECB appetite

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By Tom Brown
30 Mar 2020

The ABS secondary market had not seen an increase in purchases from the European Central Bank as of Thursday, when the central bank’s Pandemic Emergency Purchase Programme was supposed to officially start buying. ECB head Christine Lagarde invoked the spirit of her predecessor by promising to do 'whatever it takes' to save the euro from the coronavirus pandemic, but the start of the programme has left ABS traders citing miscommunication between the central bank and the securitization market.

The PEPP includes “all the asset categories eligible under the existing asset purchase programme (APP)”, which includes ABS, according to the press release. 

ABS purchase volumes from the ECB have been increasing since November 2019, but the market has not seen an anticipated rise in demand after Thursday.

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