MADRID (Reuters) - The European Central Bank is ready to bring down Italian borrowing costs if needed and comments by ECB chief Christine Lagarde that suggested complacency over spreads were misunderstood, Spanish central bank chief Pablo Hernández de Cos said on Friday.
“If it were needed we would buy Italian sovereign bonds and also from any other country to avoid fragmentation,” De Cos told reporters.
De Cos said he considered Lagarde the best person for the ECB job, pushing back on criticism that her perceived miscommunication on Thursday may have blunted the ECB’s package.
He added that not cutting rates despite market expectations was the best move because the shock is temporary. Still, the ECB stood ready to cut if that became necessary.
The ECB’s job in the crisis was to mitigate the effects of the short term shock but it was ultimately up to governments to take fiscal measures.
Reporting by Jesus Aguado; Writing by Balazs Koranyi; Editing by Francesco Canepa