ECB: No Comment On Plans To Cap Peripheral Sovereign Yields

FRANKFURT (MNI) – The European Central Bank Monday declined to
comment on a media report saying it may be planning to cap borrowing
costs for Eurozone peripheral states.

German magazine Der Spiegel reported over the weekend that the ECB
might establish pre-determined yield thresholds to decide when to
intervene in sovereign bond markets. The central bank’s Governing
Council will decide whether to implement such a strategy at its next
meeting on September 6.

Spiegel said the thresholds would serve as a signal to investors of
the yield level the ECB considers appropriate for each country. The
article also suggested the ECB would be prepared to use unlimited
resources to keep the yields of peripheral government bonds below their
targeted levels.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com

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