The ECB “would not like to use it. But if we need to use it, we will not hesitate,” she told reporters, adding that the central bank is able to “act with ambition” to ensure an even transmission of the impact of its monetary policy across the euro area.
However, Ch. Lagarde did not answer questions about whether Italy in particular would meet the requirements to be able to use this measure.
The ECB unveiled a new anti-crisis tool on Thursday to ensure the cost of borrowing by heavily indebted euro zone governments such as Italy’s is under control as interest rates rise for the first time in a decade.
The targeted bond-buying program, called the Transmission Protection Instrument (TPI), “could be deployed to contain unwarranted, disorderly market dynamics that pose serious risks to the transmission of monetary policy across the euro area,” the ECB said in a statement. in the message.
The notice also states that “the extent of purchases under the policy spillover protection measure will depend on the severity of the spillover risk.”
“By safeguarding the policy transmission mechanism, this measure will help the Governing Council to exercise its mandate to ensure price stability even more effectively.”
Borrowing prices for Italy and other financially weaker eurozone countries such as Spain and Portugal have risen recently compared to benchmark German borrowing prices.
Although the borrowing costs of Italy and some other countries are not yet dangerously high, the aim is to prevent their further rise.