The restriction of unlimited liquidity

The European Central Bank has changed the lending rules for the banks in the eurozone.  The changes, published on Saturday 16 October, clarify the ability of the ECB to refuse certain assets as collateral, so they have more certainty about the value of the underlying assets. The timing of the new rules  is significant, since ECB policymakers have become increasingly frustrated about a number of banks who remain addicted to the offers of unlimited liquidity. The ECB has been preparing this new policy since the collapse of Lehman Brothers two years ago.

                                                                                       Charlotte Vanderstraeten