March 6, 2019 / 2:03 PM / 6 months ago

Euro zone banks jump, Italian yields fall on report ECB discussing new cheap bank loans

FILE PHOTO: European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski

LONDON (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 formally as Targeted Long-Term Refinancing Operations (TLTROs) are expected to boost troubled euro zone lenders. The euro zone banks index 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 and was last down 4 basis points on the day.

The euro fell to a two-week low at around $1.12855.

Reporting by Helen Reid and Virginia Furness, Editing by Dhara Ranasinghe

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