ECB Needs ABS Data Warehouse to Succeed

The ECB needs the ABS Data Warehouse initiative to succeed and end the buyers' strike in the structured finance market.

According to an article in the IFR,

ABS is now the most common collateral group posted at the ECB’s repo window for the first time, according to the central bank’s 2010 annual report. ABS represented 24% of total collateral, up from 23% in 2009, followed by covered bonds at 21%.

Without an end to the buyers' strike, the ECB will have to continue to fund the banks that put up the structured finance collateral until the collateral matures.  Without an active secondary market for the structured finance collateral, how does the ECB know that it is protected in the event that the bank which put up the structured finance collateral becomes insolvent?

Also, it is interesting to note that the ECB handles providing transparency for structured finance securities separately from providing transparency for covered bonds.

Why?

Covered bonds are a simple form of a structured finance security.  The source for the information on the performance of the assets underlying a covered bond is the same as the source for the information on the performance of the assets underlying a structured finance security.

From a technical perspective, there is no reason that the same asset-level performance information provided for structured finance securities could not also be provided for covered bonds.