European Central Bank to buy government and private bonds
May 10, 2010 by goldguru · Leave a Comment
By Gabi Thesing and Jana Randow
Bloomberg News
Monday, May 10, 2010
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0RoeU1FECGY&pos=3
The European Central Bank said it will intervene in government and private bond markets as part of an unprecedented effort to help stave off a sovereign debt crisis that threatens to destroy the euro.
“The Governing Council decided to conduct interventions in the euro-area public and private debt securities markets to ensure depth and liquidity in those market segments which are dysfunctional,” the Frankfurt-based central bank said in a statement today. “The scope of the interventions will be determined by the Governing Council.”
The ECB said it will sterilize the purchases and announced it will hold additional longer-term operations at three- and six-month maturities. The central bank also said that it will reactivate temporary liquidity swap lines with the Federal Reserve to resume U.S. dollar tenders at terms of 7 and 84 days.
The announcement came after European finance ministers crafted a loan package that may be worth E720 billion $928 billion) in an effort to protect the single currency bloc.
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