The IMF’s European chief stated that the international fund is not considering the purchase of bonds in the European debt markets in cooperation with the Euro zone bailout.
“We do not have any additional requests for support from European members and we are not contemplating any market involvement with the EFSF,” Antonio Borges, head of the IMF’s European Department said in a statement. The European Financial Stability Facility, or EFSF, is the euro zone’s EUR440 billion bailout fund.
Earlier Wednesday, Borges said the IMF could intervene in the secondary bond markets alongside the euro-zone’s bailout fund. Under such a proposal the IMF would create a special purpose vehicle to buy bonds under stress in secondary and primary markets, Borges said at a press briefing in Brussels, Belgium.
Borges said in his later statement that current fund resources cannot be used to intervene in bond markets directly. Any alternative financing such as bond-buying “would require a different legal structure and the use of a different source of financing,” he said.
