ECB disappoints on asset-backed securities

Banks that loaded up on asset-backed securities to sell to the ECB have been left exposed by the pace and timing of the purchases, according to TwentyFour Asset Management.

Lenders are selling the debt back to the market because the ECB bought fewer bonds than anticipated and started measures to flood the euro area with liquidity at the end of the year, Mark Holman, the investment firm’s London-based chief executive, wrote in a note.

Banks bought the bonds expecting ECB purchases to spur a rally that would allow them to sell their holdings at higher prices, he wrote.