ECB leaves bond purchase program on shelf

AP News
Posted: Apr 16, 2012 10:07 AM
ECB leaves bond purchase program on shelf

The European Central Bank did not step in to the markets to buy government debt last week _ despite rising bond market pressure on Spain and Italy.

There has been speculation that worsening market conditions might push the ECB to restart the program, under which it bought the bonds of indebted countries in the secondary market. The ECB action was intended to lower their borrowing costs and take pressure off their budgets.

Monday's figures make it the fifth week in a row that the ECB has not made any purchases. Before that, only minimal deals were made for several weeks _ the bank had also not bought more than (EURO)1 billion worth of bonds since (EURO)2.24 billion ($2.92 billion) in purchases the week ending Jan. 20.

Instead of bond purchases, the bank has relied on unlimited, three-year loans to stabilize banks as its chief anti-crisis measure.