Nov. 15 (Bloomberg) -- The European Central Bank said it has bought covered bonds worth 17 million euros ($23 million) so far under its second purchase program.
The Frankfurt-based ECB announced last month that it would start a second covered-bond purchase program after its first 60 billion-euro plan expired in June 2010. The ECB intends to acquire assets worth 40 billion euros through the end of October of 2012.
The program is part of policy makers’ efforts to stablize the financial system as Greece teeters on the brink of default and Italian bond yields soar to records. The ECB is also purchasing bonds of the euro region’s most-indebted governments and provides banks with unlimited funding at its basic interest rate, currently 1.25 percent.
Covered bonds are securities typically backed by mortgages and public-sector loans. European lenders have relied on top- rated covered bonds as the euro-region sovereign crisis pushed up borrowing costs, selling 185 billion euros of the debt this year, according to data compiled by Bloomberg.
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