Buying bonds to lower borrowing costs for struggling countries

The European Central Bank began a program of buying government bonds in May 2010 in an attempt to contain the debt crisis in Greece and Portugal. In August of this year it began buying the bonds of Italy and Spain. 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.

Buying bonds to lower borrowing costs for struggling countries
Source: Bloomberg. The Washington Post. Published on August 23, 2011, 8:05 p.m.
 
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