June 15 (Reuters) – The European Central Bank’s purchasing of government bonds is not directed at bailing out governments, ECB Executive Board Member Lorenzo Bini Smaghi said late on Monday.
“(The ECB’s Securities Markets Programme) is meant to repair the integrity of the transmission mechanism, not to finance public debt,” Bini Smaghi said in a speech at a conference in New Yerk, published on the ECB’s web site.
“(Central banks) cannot be asked to rescue insolvent issuers – whether private or public institutions,” he added.