ECB to buy bonds if needed to help indebted eurozone countries
The European Central Bank will be determined to use its new bond-buying scheme to combat financial fragmentation between eurozone countries if it needs to be used, ECB policymaker Francois Villeroy de Galhau said on Friday. The ECB announced on Thursday its new Transmission Protection Instrument (TPI), which will let it buy bonds from indebted countries such as Italy to cap any excessive rise in their borrowing costs, helping limit financial fragmentation within the eurozone. The ECB also raised interest rates more than expected on Thursday, lifting its benchmark deposit rate by 50 basis points to zero percent in its first rate increase in 11 years.
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