ECB may be set to unleash ‘bazooka’ to contain crisis

The ECB could be on the verge of unleashing its biggest ‘bazooka’ yet in an effort to contain the eurozone debt crisis.

Reports emerged over the weekend that the ECB would set yield targets for bond purchases. In other words, if yields on peripheral eurozone debt, including Ireland but much more importantly Spain and Italy, exceed a certain level, then the ECB would step in and buy bonds from those countries to drive down yields.

An ECB spokesman declined to comment on what he described as press speculation and that any policy decision would be taken at the next ECB meeting in September. The report appeared over the weekend in the influential German magazine Der Spiegel.