Reuters
The new instrument being designed by the European Central Bank will show its determination to fight the risk of bond market fragmentation, but there will be no goal for specific yield spreads, governing council member Mario Centeno said on Friday. The ECB agreed at an emergency meeting last week to create a new tool to contain divergence in borrowing costs, after yields rose on government bonds issued by indebted countries in the bloc's south, widening their differential with low-risk Germany. Centeno said the new instrument will "fight the risks of fragmentation" as monetary policy is gradually normalised, but that "there is no single typology of indicators to measure the materialization of fragmentation".