Direct European Central Bank intervention in the market for asset-backed securities (ABS) has the potential to become, under certain conditions, a mechanism to unlock credit markets in the euro area. * When and how the ECB acts will be significant. Acting immediately to purchase existing...

We analyze collateralized loan obligation (CLO) transactions by European banks (1997 - 2004), trying to identify firm-specific and macroeconomic factors influencing an institution's securitization decision. CLO issuance seems to be an appropriate funding tool for large banks with high risk and...