ECB temporarily bans itself from buying loans from Volkswagen

The European Central Bank (ECB) has reportedly temporarily banned itself from buying asset-backed securities from scandal-hit Volkswagen.

According to the Sunday Times, which said the ban had been confirmed over the weekend by an insider, sources have told it other buyers are expected to do the same.

The loans, which are backed by Volkswagen's car loans through its financial services arm, will be excluded from the ECB's quantitative easing programme until the ban is lifted. The ban will only been withdrawn once the company's future is looking clearer, sources said. Volkswagen is the single biggest seller of corporate bonds in Europe.

Meanwhile, the company is believed to have promoted production chief Oliver Blume to Matthias Mueller's former role as head of the company's AG unit, after Mueller became the new chief executive on Friday, replacing Martin Winterkorn who was ousted in the wake of the emissions testing debacle.

According to Bloomberg, a person familiar with the matter said Blume's appointment would be finalised at a Porche board meeting soon.

Volkswagen has also been hit by the warnings from the three of the main credit ratings agencies that they are all considering downgrading their ratings on the car-maker's debt.

In another blow, the Swiss Federal Roads office on Friday announced that it had placed a temporary ban on the sale of Volkswagen diesel-engine models, affecting as many as 180,000 cars that fall under the Euro5 emission category. A total of 11m vehicle are thought to have been affected by the scandal.