Wednesday, December 2, 2009

Germany aims to revive securitisation

Posted on Reuters by Matthias Sobolewski and Paul Carrel:

The German government aims to revive the market for the securisation of credit default risks to prevent a credit crisis hitting the economy, a senior government source said on Tuesday.

The government would present the idea at a meeting Chancellor Angela Merkel is hosting on Wednesday with business leaders and bankers to discuss tight credit conditions in Germany, the source said.

Under the plan, state-owned development bank KfW would facilitate the removal of credit default risks from banks' balance sheets by offering guarantees for mezzanine, or mid-level tranches of assets, the source said.

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