ECB eases collateral rules

19 July 2013

The European Central Bank (ECB) has eased the rules on collateral causing the eurozone debt to stabilise.

Meanwhile, a reduction in bond purchasing by the Federal Reserve in the US has also helped to calm investors.

The ECB announced it was expanding the list of asset-backed securities eligible for use by institutions in exchange for its cheap loans, reports Reuters.

It will hopefully see more money lent from banks to small and medium-sized businesses in the near future - something governments across the continent see as a key factor in the economic recovery.

The ECB has said it will keep interest rates at record lows for an extended period of time and may return to its bond-buying programme should it need to.

Central banks in European nations are largely sticking to the same approach. For example, the Bank of England is reducing its stimulus but keeping interest rates low for now.

By Asim Shah

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