European Central Bank vows to create backstop against market turmoil

Christine Lagarde, European Central Bank president (AP)

The European Central Bank (ECB) has vowed to create an unspecified market backstop that could be used to buffer some countries against bond market turmoil similar to what shook the 19-country eurozone during a debt crisis more than a decade ago.

The statement came after an unscheduled meeting of the bank’s governing council and aims to address a sell-off in Italian and Spanish government debt in the wake of the bank’s decision to start raising interest rates in July for the first time in 11 years.