ECB to relax loan rules for spanish banks

FT.com :
"The European Central Bank is expected to give Spanish banks a much-needed boost with a significant loosening of rules on collateral required to obtain its liquidity, which could be followed by steps to reduce the role of credit-rating agencies.
The concession, which could be announced as early as Friday, would allow Spanish banks to make greater use of asset-backed securities when drawing ECB funds. The move – coming as European authorities and Madrid draw up plans to recapitalise the country’s banks – will help to offset a possible liquidity squeeze caused by downgrades by credit rating agencies.
The decision by the ECB’s 22-strong governing council is part of a review of collateral rules aimed at ensuring liquidity continues to flow to sound eurozone banks – and to reduce its reliance on external bodies such as Standard & Poor’s and Moody’s.