ECB's Mersch sees ABS purchases as one of means for achieving price stability

FXStreet (Barcelona) - Speaking at the Global ABS Conference organised by the Association for Financial Markets in Europe in Barcelona, Spain, ECB Executive Board member Yves Mersch said that a more “holictic approach” is needed for the regulation of asset-backed securities. He suggested that the central bank might purchase "simple and transparent" ABS as a means to an end for achieving price stability in the Eurozone.

"There is a growing consensus that an instrument once seen as part of the problem could in fact be part of the solution," Mersch stressed.

The ECB policymaker suggested that a greater standardization of ABS products would be a good way to boost market activity in the EU. He also urged rating agencies to enhance the transparency of the process through which they establish ratings for ABS products.

In a few weeks the European Commission would provide information regarding which ABS are "high quality and liquid," Mersch added.