One day after the biggest jump ever in the bond yields, the central bank chief had come out fighting. The governor of Bank of Italy, Ignazio Visco since the year 2011 and the former economies at OECD, had only one mission for the repairing of damage which had been caused by colleagues, the Central Bank President of Europe had suggested that this was not her institution’s job to be narrowing the spreads. Visco said that the imposition of the 19th century citadel close to former residence of Quirinal Palace in the city of Rome had suggested that the officials of Eurozone may be frontloading the bond purchase of the debt of the country of required. The investors had taken this hint and spread of the bond begun to narrow.
The governor of Bank of Italy said that the monetary policy must ensure that the markets are not gripped by the fragmentation and fear. The monetary policy has responsibility of reducing the financial turbulence as much as it can and avoid the market fragmentation. In a few countries. The interest rates have been rising sharply and there is a flight for the safer assets. This has affected a few of the instruments, in particular the countries where there are perceptions of problems with public intervention and growth which is not okay as per them and they need to be guaranteeing the uniform conditions for the entire area of Europe in terms of finance.
He also made a reassurance to the investors that the words of Lagarde had been misconstrued as he said that there should be focus on substance saying that they will intervene when it is required.