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ECB says checking status of loans made to Spanish banks
The European Central Bank (ECB) is checking whether it may have contravened its own strict rules by lending to Spanish banks on overly generous terms, an ECB spokeswoman said on Sunday. German newspaper Die Welt am Sonntag, citing the results of its own research, said that banks had borrowed funds from the ECB and taken a haircut of 0.5 percent even though the creditworthiness of the Spanish T-bills they provided as collateral should have required the ECB to apply a haircut of 5.5 percent. The rating of some paper should have made them completely ineligible as collateral for the ECB, the newspaper added. "The ECB ... (full story)