European shares rally on report ECB mulling corporate bonds buys
* FTSEurofirst 300 up 1.3 pct
* Rallies as Reuters reports ECB considering corporate bond buys
* Total shares fall after CEO killed in accident
By Francesco Canepa
LONDON, Oct 21 (Reuters) - Banks and shares in peripheral countries led a European rally on Tuesday after sources told Reuters the European Central Bank is considering buying corporate bonds to revive the region's economy.
The purchases, which the sources said could be approved in December and start early next year, are seen helping banks, especially in struggling southern European countries, free up more of their balance sheet and lend more.
The Euro STOXX banking index was up 3 percent at 1028 GMT, with the biggest gains seen in Greek, Italian and French banks.
The ECB began buying covered bonds on Monday, part of a private-sector asset-purchase programme that will also see it buy bundled loans known as asset-backed securities (ABS) later this year. However, there is concern at the ECB that these measures may have an insufficient impact to help support the economy.
After a year-long review of Europe's 130 biggest banks, the ECB is set to announce on Oct. 26 which have valued their assets properly and which have not, as well as whether banks need more capital to withstand another economic crash. Continuación...