ECB and BoE ‘must act quickly and revive the securitised debt market’

Europe’s two top central banks must turn talk of reviving the securitised debt market to fund economic growth into speedy action, a top banking lobby said yesterday.

The market for debt backed by pooled home and other loans was tarnished when bonds securitising low-quality US mortgages became untradable, kicking off the 2007-09 financial crisis that eventually led to taxpayers having to bail out banks.

The ECB and the Bank of England have said for months that reviving the top-quality end of the market would help plug a funding gap created by banks lending less, especially to small and medium-sized companies.