The European Central Bank has called an unusual meeting to address the bond market’s fall, which has echoes of the debt crisis

June 17, 2022

Policymakers at the European Central Bank met in an unusual, unannounced meeting on Wednesday to address a spike in borrowing prices for some eurozone countries, fueling speculation that the bank is preparing to intervene to calm markets.

Since the ECB announced a series of rate hikes and ended a debt-buying program in the face of increasing inflation last Thursday, yields on bonds issued by Italy and other debt-laden countries have increased substantially.

Faced with the possibility of a repetition of the debt crisis that nearly took the euro down a decade ago, the European Central Bank’s policy-making Governing Council met to consider how to respond to recent market upheaval.

The euro climbed more than 0.5 percent to 1.0487 versus the dollar on the news of the ECB meeting, 10-year Italian rates plummeted 22 basis points, and Italian stock futures rose strongly.

Source: Financial Post
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