Spiegel reported over the weekend that based on unsourced data, "the ECB is considering to establish in its future bond purchases interest rate levels for each country. Thus, it would buy sovereign debt of the crisis countries whenever interest rates exceed a certain spread to German Bunds... At its next meeting in early September, the Governing Council will decide whether the interest rate target is actually installed."
The measure may potentially fend off troubled economies from seeing the long end of its yield curve widen past a particular level. The ECB should determine what interest level considers appropriate. That would discourage speculators from pushing yields above the level set by the euro zone's central bank, the magazine said.
The report comes after ECB President Mario Draghi suggested earlier this month that in order for debt markets to return back to stable levels, a resumption of the bond buying government debt program may be needed; Any intervention, however, would be subject to governments requesting financial support aka a bailout from the euro zone safety net, which in turn would be linked to conditions.
German Finance Minister Wolfgang Schaeuble on Saturday rejected the idea of financing state debt via the European Central Bank: "If we start doing that, we won't stop. It's like when you start trying to solve your problems with drugs," he said.
Spiegel said, with quotes via Reuters, "the ECB wants to make its bond purchases more transparent in future and plans to start announcing the volume of its sovereign bond purchases immediately after buying them. At present the bank announces each Monday how much money it spent on bond purchases during the previous week."
