Jan. 24 (Bloomberg) -- European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said banks will be more comfortable borrowing from the ECB at its next three-year loan offering next month.
“The big take-up in December took away the stigma effect; we had more than 500 institutions bidding,” Gonzalez-Paramo said at the Bloomberg Sovereign Debt Crisis Conference hosted by Bloomberg Link in New York today. “So now there is no stigma, so that should promote more bidding.”
He said demand would depend on a number of issues, including that “due to actions of rating agencies, good or bad, a number of banks have lost the possibility to post asset-backed securities with us,” which is why the ECB has relaxed the collateral requirements.
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