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LONDON, March 6 (Reuters) - Euro zone bank shares jumped and Italian government bond yields fell on Wednesday after Bloomberg reported the European Central Bank is holding discussions on the design of new ultra-cheap bank loans.
The ECB meets on Thursday amid speculation that it is getting ready for a fresh round of stimulus via cheap bank loans.
The loans known more formallly as Targeted Long-Term Refinancing Operations (TLTROs) are expected to boost troubled euro zone lenders. The euro zone banks index .SX7E rose to a day’s high, up 0.2 percent.
Italian government bond yields also briefly extended falls as investors cheered the report. Italy’s 10-year government bond yield touched its lowest level in just over a month at 2.661 percent IT10YT=RR and was last down 4 basis points on the day.
The euro fell to a two-week low at around $1.12855 EUR=. (Reporting by Helen Reid and Virginia Furness, Editing by Dhara Ranasinghe)