Buying bonds in Italy and Spain

The European Central Bank bought Italian and Spanish government bonds last week in an attempt to contain the debt crisis in the two countries. In the bond markets, yields decrease as demand increases. The yield is the amount of interest the government pays on the bonds. Riskier bonds carry higher interest rates. Rates for 10-year bonds in Italy were at their highest since June 1 at 6.2 percent on Aug. 4 and in Spain, 6.3 percent on July 18. Monday rates in Spain were 5 percent and just above 5 percent in Italy.

Buying bonds in Italy and Spain
Source: Bloomberg News. The Washington Post. Published on August 15, 2011, 7:13 p.m.
 
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