ECB official backs using rescue fund to buy bonds
FRANKFURT, Germany — A top European Central Bank official has backed using a eurozone bailout fund to buy government bonds on the open market to ease market stresses from the debt crisis.
Benoit Coeure, a member of the ECB's six-member executive committee, said in an interview with the Financial Times that "current circumstances would probably warrant EFSF intervention in the secondary market." That's provided governments receiving the support agree to conditions that help them remedy their financial troubles.
The EFSF is the European Financial Stability Facility.
Buying bonds pushes up prices and lowers interest yields, since prices and yields move in opposite directions. High yields reflecting the costs governments must pay to borrow are threatening to push Spain toward a bailout like the ones received by Greece, Ireland and Portugal.
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