The European Union is considering the use of low-rated securities as collateral from debtors to make it easier for banks to meet the minimum they need to hold in reserve. A draft document of the proposal indicates that European banks could accept securitizations with ratings that “had not deteriorated below” investment grade, which translates to BBB- by Fitch Ratings and Standard & Poor’s, or Baa3 by Moody’s Investors Service.

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