MAINZ/Germany (MNI) – The European Central Bank’s OMT bond buying
program is aimed solely at removing tail risks of a Eurozone breakup and
does not seek to create a uniform interest rate across the currency
union, ECB Executive Board member Joerg Asmussen said Wednesday.
“The aim of the OMT is to take out the tail risks and not to create
a uniform interest rate,” Asmussen said at a conference on risk
management. “The ECB has no target rate or target spread.”
The comments could seen as a blow to Spain, which has called on the
ECB to offer more transparency on the possible scope of sovereign bond
market interventions and said they should be enough to produce a
significant improvement in its borrowing costs.
In a discussion about how to generate growth in the Eurozone,
Asmussen said that he would not be in favor of a debate about changing
the ECB’s mandate. He stressed that the primary price stability mandate
has served the currency union very well and emphasized that interest
rates were already at “historic lows.”
Asmussen said that “inflation will go below 2% next year” and that
price expectations in the Eurozone remained well-anchored. “Should we
see inflation risks rising, we will use instruments to contain
them,” he asserted.
–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@mni-news.com
[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
