— Tells Governments To Keep Out Of ECB Business

FRANKFURT (MNI) – A press report that the European Central Bank may
be planning to cap borrowing costs for Eurozone peripheral states is
“misleading,” since the Governing Council has not yet taken any decision
on future sovereign bond purchases, an ECB press spokesman said Monday.

“It is absolutely misleading to report on decisions which have not
yet been taken and also on individual views, which have not yet been
discussed by the ECB’s Governing Council, which will act strictly within
its mandate,” the ECB spokesman said in an e-mailed statement.

“As far as recent statements by government officials are concerned,
it is also wrong to speculate on the shape of future ECB interventions.
Monetary policy is independent and undertaken strictly within the ECB
mandate,” the spokesman said.

The 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: jtreeck@mni-news.com

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