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Super interesting report from MNI:Italian Prime Minister reiterated his hope that there will soon be policy steps to put a cap on the wide spreads between yields on euro periphery country bonds and those of the core euro zone states.
Speaking at the London School of Economics, Monti said doing one’s “homework” in terms of taking much-needed fiscal action in Italy’s case had not been enough to bring high yield spreads down.
He doesn’t go into any details about what he means, but “cap” is a very interesting word to use, since it goes beyond just generic peripheral bond buying (by the ECB or some fund), but an actual commitment to keep rates/spreads from going too high.
Again, we’re not sure what he meant here, but one thing that’s clear is that he’s not just talking about internal domestic reforms, since he talks about the periphery as a whole, not just Italy.
Again, details are super-light here, but if he actually said “cap” and he’s referring to anything vaguely real, then this is significant.