Villeroy (ECB): Our new market interventions should be ‘sterile’

More details on the new program planned by the European Central Bank against financial fragmentation between the countries of the Eurozone were given today by the member of the Board. of the bank and Governor of the Bank of France, Francois Villeroy de Galhau, as reported by Reuters.

It is recalled that the ECB, at its extraordinary meeting last weekcalled on the relevant Eurosystem committees to expedite the completion of the planning of a new anti-fragmentation instrument, which will then be considered by the Governing Council.

Speaking to the Italian newspaper Corriere della Sera today, Villeroy said that meeting was the best proof that there are no limits to the ECB’s commitment to stable prices, but also to the protection of the euro.

“This [το πρόγραμμα] should be a supportive tool. “It should be available for as long as it takes to make it clear that our commitment to protecting the euro knows no bounds.”

“The more reliable this tool is, the less it may need to be used in practice. This is how a support framework works,” he added.

Villeroy noted that a tool to address the re-emergence of fragmentation risks is needed to ensure the smooth transmission of monetary policy across the euro area.

The central banker also said that the program will be governed by rules, but the ECB will have the flexibility to act as it sees fit and market interventions should be “sterile”, ie in a way that does not affect its direction. monetary policy.

Finally, he noted that the bonds that will be bought do not have to be held until their maturity, but on the contrary, until the turmoil in the markets subsides. “In other words, we will be able to have more flexibility in the market, but also in sales [των ομολόγων] “after some time,” he added.