Yves Mersch, a member of the ECB policy council, has said the European Central Bank will announce changes to its money-market rules in coming weeks to head off the risk of abuse by some financial institutions. “At the margins there can still be cases where you see dangers of gaming the system,” Mersch said Saturday in an interview. “The governing council has been discussing the whole issue” and has agreed on a “certain amount” of refinement to the existing rules, he said. ECB officials have become more concerned in recent months that banks are taking advantage of collateral rules that are broader than those used by the Federal Reserve and the Bank of England. The danger is that banks struggling to sell the securities that have been most damaged by the credit-market rout will seek to dump them on the ECB and become overly reliant on central bank funds. “It's not a broad-based revolution,” said Mersch, who was attending the Jackson Hole meeting of central bankers and financial officials organized by the Fed. “We are satisfied with our framework. But since there are always on the margins evolutions we have to adjust our framework regularly to market practices.”
