The European Central Bank said it will widen the range of securities it accepts from euro zone banks in exchange for its loans in a move to boost lending to firms and households.

The ECB said in a statement that its policy-setting governing council decided at a meeting on Wednesday 'on additional measures to improve the access of the banking sector to (its) operations in order to further support the provision of credit to households and non-financial corporations.'

The measures included a reduction in the rating threshold and an amendment of the eligibility requirements for certain asset-backed securities (ABSs), the statement said on Friday.

In a move that will particularly help Spanish banks, saddled with huge amounts of mortgage loans dating back to a property bubble that burst in 2008, the ECB said it would now accept residential mortgage-backed securities as collateral for loans.

Similarly, auto loan, leasing and consumer finance ABSs would also be included in the pool of eligible collateral, the central bank said.

The changes would come into effect after June 28, it added.

The move comes as Spain is drawing up measures to recapitalise its banks.

On Thursday, Spain announced that its crisis-torn banks needed up to 62 billion euros ($78bn) to survive a severe financial slump - considerably less than the maximum 100bn euros originally foreseen in a June 9 euro zone rescue offer.

Spanish Finance Minister Luis De Guindos announced yesterday that a formal request for euro zone aid would be submitted on Monday.-Reuters