Former-ECB Economist Stark Says Euro Area Needs to Shrink
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German bunds rose, with two- and five-year yields dropping to records, after an auction of securities due in 2014 drew a negative yield for the first time as investors sought a haven from the region’s financial turmoil.
Two-year notes advanced for the fifth time in six days after Germany allotted 4.17 billion euros ($5.1 billion) of the debt at an average rate of minus 0.06 percent at today’s sale. Finland’s two-year yields fell below zero for the first time, while rates on 10-year French and Austrian securities also tumbled to records. Spanish bonds dropped after a report showed bad loans at the country’s banks jumped to an 18-year-high.