ECB to purchase unlimited sovereign bonds

7 September 2012

The eurozone appears to be facing a more secure future after the European Central Bank (ECB) unveiled a new rescue plan for the region.

Under the terms of this policy, the institution will purchase an unlimited amount of sovereign bonds from member states in order to drive down borrowing costs across the economic bloc.

Earlier in the summer, ECB president Mario Draghi insisted policymakers would do "whatever it takes" to save the single currency and this latest plan offers evidence he will be as good as his word.

During a speech delivered in Potsdam, Germany, yesterday (6 September), Mr Draghi insisted there are "many reasons" to be optimistic with regard to the eurozone's fiscal prospects.

"The pattern over recent decades has always been to move forward towards a stronger and more united Europe. When we have faced challenges, we have invariably found solutions," he noted.

This announcement has resulted in investor confidence rising across the continent, leading the single currency and stock markets higher.

By Asim Shah

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