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ECB spokeswoman: usual for Draghi to meet ECB officials

by fwire  Jul 28, 2012 02:00 IST

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REUTERS - A spokeswoman for the European Central Bank said on Friday it was usual practice for ECB President Mario Draghi to meet with governing council members.

The spokeswoman declined further comment.

U.S. stocks rallied on Friday after a Bloomberg report said that Draghi would meet with Bundesbank President Jens Weidmann to discuss several measures, including bond purchases, to help the euro zone.

Financial market hopes for ECB help have been high since Draghi said on Thursday the central bank would do whatever it takes to preserve the euro.

Draghi's proposal involves letting Europe's rescue funds buy government bonds on the primary market to supplement ECB purchases on the secondary market. Further ECB interest rate cuts and long-term loans to banks are also being discussed, Bloomberg reported.

Securing the agreement of the Bundesbank, which has been openly skeptical about the wisdom of massive bond purchases, would likely make it easier for the ECB to rein in soaring Spanish and Italian yields.

A Bundesbank spokesman said such meetings were "not unusual," adding, "they take place if there is something that needs to be discussed."

The euro soared to a session high of $1.2389 on the report but has since given back most of those gains. The S&P 500 hit its highest level since May 4 and the Dow industrials rose above 13,000.

Yields on Spanish and Italian government bonds fell on Friday in hopes of ECB action.

Earlier this week, before Draghi's comments, Spanish yields rose above 7 percent to their highest level since the euro was introduced amid market fears that the indebted country might require an emergency bailout.

(Editing by Kenneth Barry)

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