Paris: The European Central Bank (ECB) said on Thursday it will start its purchases of asset-backed securities or ABS in November in a bid to kick-start credit in the euro area.
The ECB has drawn up an Asset-Backed Securities Purchase Programme (ABSPP) as "one of a number of measures ... to facilitate the provision of credit to the euro area economy."
And purchases under the ABSPP "are expected to start in November 2014," the bank said in a statement on Thursday.
Asset-backed securities (ABS) are bundles of individual loans such as mortgages, auto credit and credit-card debt which are sold on to investors, allowing banks to share the risk of default and freeing up funds to offer more credit.
The ECB believes that the market for such securities -- an important source of financing for banks to keep lending to small and medium-sized enterprises -- has effectively dried up since the financial crisis.
And the ECB hopes that by buying them on a large scale, it can help revive the market and free up some of the credit channels which have seized up during the long years of crisis.
