ECB purchases could boost lending - IMF

Washington - The European Central Bank's purchases of asset-backed securities could help address the problem of weak lending to small and medium-sized firms in the eurozone, the IMF's chief economist said.

"We think that...a good, healthy (asset-backed securities) market would be useful," Olivier Blanchard said at a press conference on Tuesday. "This is a market in which spreads are still sometimes quite large, so we think the ECB can indeed help by developing that (market)."

ECB President Mario Draghi outlined last week new programs under which the euro zone's central bank will buy asset-backed securities, which repackage bank loans, and covered bonds, secured on solid assets such as property, starting within weeks.