MILAN, July 3 (Reuters) - The Bank of Italy will buy about
10 billion euros of covered bonds as part of the European
Central Bank's overall 60 billion euro ($84 billion) bond
purchase programme, a monetary source said on Friday.
"The overall amount of 60 billion euros has been split up
among 16 euro-zone countries on the basis of the single national
central bank's stake in the capital (of the ECB)," the source
told Reuters on condition of anonymity.
"On that basis the Bank of Italy has been assigned around 10
billion euros," the source said.
ECB President Jean-Claude Trichet said on Thursday the bank
would begin its unorthodox programme of buying mortgage and
public sector debt-backed bonds on July 6, targeting maturities
of between three and 10 years.
National central banks will make 92 percent of the purchases
in a programme designed to increase liquidity and encourage
banks to lend to their clients.
"Each central bank will go to the market like any other
investors, participating in offers when they are launched on the
primary market or buying on the secondary market," the monetary
source said.
"In this second case each central bank will make an offer
for a significant amount and will have to target securities that
have sufficient liquidity," the source said.
The Bank of Italy will move on various markets in the euro
zone though the domestic market will be the focus, another
monetary source said.
"It's true that at present it (the Italian market) offers
few instruments of this kind but there are already quite a few
banks planning significant operations in the coming months and
in these cases purchases could be made when the issue is
launched," a banking source said.
(Reporting by Gabriella Bruschi, writing by Stephen Jewkes,
editing by Mike Peacock)
($1=.7133 Euro)
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