The European Central Bank is eyeing to establish a new tool that will ease fragmentation risks in the eurozone as it seeks to address debt crisis concerns. EZU is up 1.99%, while VGK is up 1.83%.
- The ECB said it will reinvest availments on its emergency bond purchasing program to fast-track the design of a new anti-fragmentation instrument.
- ECB Executive Board Member Isabel Schnabel said the new tool is a commitment to the euro and has no limits.
- Schnabel noted that the historical performance of the ECB “stepping in when needed” reinforces the commitment.
- The announcement comes after the ECB made an emergency meeting to discuss higher borrowing costs for a number of governments in the eurozone.
- ECB said the Governing Council has committed to act against “resurgent” fragmentation risks since it started the gradual policy normalization in 2021.