ECB's Coeure: Bond-buying still euro-zone option

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ECB's Coeure: Bond-buying still euro-zone option
« on: April 11, 2012, 03:54:40 PM »
ECB's Coeure: Bond-buying still euro-zone option
11 April 2012
, by Barbara Kollmeyer - Madrid (MarketWatch)

Bond yields for Spain and Italy pulled back on Wednesday after a member of the European Central Bank's executive board, reportedly said the central bank still has the option of restarting its bond-buying program, given current market pressures.

"Will the ECB intervene? We have an instrument for intervention, the SMP, which has not been used recently but which exists," the ECB's Benoit Coeure reportedly said at a conference in Paris.

Thus far, the German Bundesbank and other ECB members have resisted the idea of re-instating the bond buying program, otherwise known as the Securities Market Programme (SMP).

Reuters reported that another ECB executive board member, Joerg Asmussen, said the ECB has "done its part," and the "ball is now in the court of the government."

Asmussen made the comments in an advance release of an interveiw to run in Il Mondo, an Italian weekly, on Friday, Reuters reported.

Coeure said while the normalization within certain markets segments is happening, the recent activity in markets shows it's still fragile.

In Spain, he said "the political will is there, which makes me think that what is happening at the moment in the market does not reflect the fundamentals."

The yield on Spain's 10-year government bond dropped 10 basis points to 5.84%, while yields on Italy's 10-year bond fell 9 basis points to 5.51%.
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