HONG KONG The European Central Bank is ready to buy sovereign bonds of euro zone countries that require assistance and agree to fiscal adjustment programmes, European Central Bank Executive Board member Benoit Coeure said on Wednesday.
The launch of the Outright Monetary Transactions (OMT) bond-buying programme has helped calm financial markets and bring down sovereign bond spreads for troubled countries, including Spain -- which the markets expects will seek a bailout.
"Let me confirm that the ECB is ready to undertake OMTs whenever a country has successfully applied for an ESM precautionary assistance programme, with IMF involvement," Coeure said prepared remarks for the third annual Thomson Reuters Pan-Asian Regulatory Summit.
Coeure also said a proposed single supervisory mechanism (SSM) would be key to the Europe's financial stability and to bolster financial integration in the region, saying political leaders were likely to agree on final details next month.
"I am confident that European leaders can agree in December on the final features of the SSM and confirm that it will start legally in January 2013 and operationally in 2014," he said.
Coeure said the ECB remained committed to promptly implementing the Basel III bank capital rules that are due to be phased in from January 2013, saying they were "a cornerstone of the G20 reform agenda".
U.S. regulators have cast doubt on that implementation date, prompting European banks to seek a delay so they are not at a competitive disadvantage.
"Delayed implementation of Basel II.5 and Basel III by any major jurisdiction would weaken the incentives for financial institutions to comply and also cast serious doubt on the overall reform effort," Coeure said.
(Reporting by Elzio Barreto and Vikram Subhedar; Editing by John Mair)